What next for Huawei after yet more US tech sanctions?

What next for Huawei after yet more US tech sanctions?

  • The US Commerce Department has added to its list of firms banned from buying American products, to try to cut off Huawei’s  access to semiconductors.

After the United States further tightened its restrictions on Chinese telecoms maker Huawei on Monday, analysts had only one word to describe the situationfacing the company: impossible.

In what has become a major battleground in the growing US-China tech rivalry, the Trump administration – which claims Huawei products could be used to facilitate spying by the Chinese government – has blacklisted a further 38 Huawei affiliates from buying US products. It aims to strangle the Chinese company by cutting off its ability to buy semiconductors produced using American technology.

Since May, foreign chip makers using US technology have been required to apply for a license to sell chips to Huawei. That enabled Washington to influence Taiwan Semiconductor Manufacturing, the world’s biggest contract chip maker and a key Huawei supplier.

Now, the US Commerce Department has added the 38 affiliate firms to its “entity list” to restrict US companies from doing business with them without specific authorization from the US government. Its goal is to prevent Huawei, China’s largest tech company, from bypassing the earlier sanctions by sourcing products via third parties.

“It’s hard to imagine how Huawei can turn the tables now,” said Yang Guang, director of service provider research at Strategy Analytics. “All the power of one company cannot build the entire industrial chain by itself. It is impossible.”