The U.S. will allow companies to sell components to Huawei, as long as they are not compatible with 5G. This, in short, means that companies like TSMC could do business with Huawei again.
This move will be a relief for the company since they are being hit hard by the current trade war between the U.S. and China. So far, Huawei has not made any official statements on the subject.
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The Trump government continues to put pressure on one of Huawei’s biggest businesses: connectivity. Although Huawei is strong in the smartphone arena, one of its biggest businesses is in the networks sector, which is currently in full swing with the arrival of 5G mobiles.
The U.S. Department of Commerce has told companies that “while licenses to supply Huawei are handled with a view to denial, this can be overcome if it can be shown that its technology is not compatible with 5G.” In other words, companies could try to get a license to do business with Huawei as long as the components sold are not compatible with 5G.
This is an important decision, as it would allow companies like TSMC, one of China’s largest processor manufacturers, to collaborate with Huawei again and manufacture their Kirin processors.
Earlier this year, the U.S. government tightened export controls on U.S. equipment and software so any foreign chip manufacturer using U.S. tools, intellectual property or design equipment have to seek a license from the U.S. Department of Commerce before shipping Huawei’s products.
The United States lets Huawei buy components, as long as they are not compatible with 5G. This measure, on paper, will slightly reduce the pressure on the company, although there is nothing official yet.