U.S. May Tighten Noose Around Huawei, Cut Off Chip Supply

In its ongoing battle with Chinese firm Huawei, the U.S. may be planning on tightening the noose by cutting off its access to chip suppliers, such as Taiwan’s TSMC.

U.S. officials have been pressuring allies to ban Huawei from their networks as the U.S. has done. The campaign has met with only limited success, with even the UK opting to include Huawei in a limited role.

It appears the U.S. may be shifting tactics and going after Huawei’s supplies. According to Reuters, the U.S. may “alter the Foreign Direct Product Rule, which subjects some foreign-made goods based on U.S. technology or software to U.S. regulations.

“Under the draft proposal, the U.S. government would force foreign companies that use U.S. chipmaking equipment to seek a U.S. license before supplying Huawei – a major expansion of export control authority that could anger U.S. allies worldwide.”

If the U.S. decides to go this route, it could do serious harm to Huawei’s business, but would also result in significant collateral damage. TSMC’s business would certainly be harmed, which could have ripple effects on its customers. As Reuters points out, if the U.S. goes with such a drastic measure, it’s sure to anger allies and may do far more harm than good.