US bans sales to Huawei of semiconductors and semiconductor designs made abroad using certain US software and technology

WASHINGTON (Reuters) - The Trump administration on Friday moved to block shipments of semiconductors to Huawei Technologies from global chipmakers, in an action that could ramp up tensions with China.

Reuters 2020-05-16

Context & Ripple Effects

This rule closes the loophole that defined the first year of the Huawei ban: US suppliers including Intel and Micron had kept selling to Huawei by routing products through foreign-made lines, as reported in 2019 reporting on companies finding ways around the ban. By extending jurisdiction to chips and chip designs fabricated abroad with US software and technology, Washington targets TSMC's manufacturing relationship with Huawei — the chokepoint the earlier entity-list action left open.

The move is the opening move of a four-year escalation arc: an August 2020 tightening that added Huawei affiliates in 21 countries to the blacklist, then 2024 license revocations hitting Intel and Qualcomm, with Beijing answering through retaliatory bans on dual-use minerals and a documented push toward domestic substitution — teardowns showing Chinese-made content in Huawei phones rising from 32% of components in 2023 to 57% in the Mate 70 Pro and Pura 80 Pro.

First-order effects

Huawei's smartphone and telecom-equipment lines lose access to TSMC-fabricated chips, since any fab using US software or technology now needs a license to ship to Huawei; global foundries must halt or restructure Huawei orders immediately.
US tool and EDA vendors whose software underpins foreign fabrication see their effective export perimeter expand from direct sales to anything built with their inputs, putting revenue at risk at foundries serving Chinese customers.

Second-order effects

Beijing accelerates self-sufficiency spending — state-backed hard-tech venture funds above $7.1 billion each, a requirement that new chip capacity use at least 50% domestic equipment, and retrofitting of older ASML DUV lithography machines to push toward advanced-node production.
The licensing regime becomes a managed dial rather than a wall: Washington later tightens it further in August 2020 and selectively revokes Intel and Qualcomm licenses in 2024, while suppliers like Intel and Micron demonstrate both the profitability and fragility of workaround channels.

Third-order effects

If the pattern holds, semiconductor supply chains bifurcate along national-control lines: each US restriction cycle is answered by Chinese mineral-export retaliation and higher domestic-content floors, pushing global chipmakers toward duplicated, regionally aligned supply chains.
Export control shifts from product-based lists to technology-provenance rules — controlling where and how chips are made rather than just who buys them — setting the template for later attempts to close parameter gaps around AI chips.

The trend: The US is converting export controls from entity lists into provenance-based chokepoints on chip fabrication, and each tightening is met with accelerating Chinese substitution and retaliation.

Discussion

@kennedycsis Scott Kennedy on x
Wow! I guess there was no quid pro quo b/t having TSMC build a fab in Arizona and allowing them to continue to sell to Huawei. Not. US-China relations are going to get even bumpier quickly. https://www.cnbc.com/...
@nikkihaley Nikki Haley on x
China will lose their bucket over this move. It is hands down the right move for us in terms of national security. 🇺🇸 #TheyDeserveToLoseTheirBucket https://www.wsj.com/...
@repgallagher Rep. Mike Gallagher on x
And then today, @CommerceGov announced a critical new rule that closes a loophole through which US technology was still going to support Huawei's campaign for 5G domination. This will dramatically expand pressure and better secure our networks. https://www.commerce.gov/...
@jackposobiec Jack Posobiec on x
Cut them off completely U.S.-China tensions rise as Trump administration moves to cut Huawei off from global chip suppliers https://www.cnbc.com/...
@danwwang Dan Wang on x
Huawei is going to be in a tough spot when these new rules prevent it from designing chips and having them manufactured (e.g. by TSMC). The rules will make it hard for Huawei to make phones and base stations, which accounted for ~90% of revenue in 2019. https://www.commerce.gov/.…
@niubi Bill Bishop on x
Commerce Addresses Huawei's Efforts to Undermine Entity List, Restricts Products Designed and Produced with U.S. Technologies | U.S. Department of Commerce -fun for huawei and tsmc https://www.commerce.gov/...
@navroopsingh_ Navroop Singh on x
China ready to target Apple, Qualcomm, Cisco and Boeing in retaliation against US' Huawei ban: source - Global Times https://www.globaltimes.cn/...
@globaltimesnews @globaltimesnews on x
China should take #countermeasures against US #Huawei ban to the extent that the US “dare not ask for a mile after being given an inch”: analysts https://www.globaltimes.cn/... https://twitter.com/...
@globaltimesnews @globaltimesnews on x
#Breaking: A source close to Chinese govt told GT that China may use laws and rules like Cybersecurity Review Measures and Anti-monopoly Law to investigate & impose restrictions on US firms like #Apple, #Qualcomm and #Cisco in response to #Huawei ban. https://www.globaltimes.cn/.…
@sariarhohavren Sari Arho Havrn on x
On Friday, “the Trump administration moved to block shipments of semiconductors to Huawei from global chipmakers. The US Commerce Department said it was amending an export rule to strategically target Huawei's acquisition of semiconductors..” https://www.cnbc.com/...
@gchikermane Gautam Chikermane on x
As the US amends an export rule to “strategically target Huawei's acquisition of semiconductors that are the direct product of certain US software and technology,”... https://www.reuters.com/... 1/2
@georgemagnus1 George Magnus on x
Trump's new threat re semis sakes to Huawei has ruffled more feathers. Here's a GT broadside as response: China readies biggest counterattack against US - Global Times https://www.globaltimes.cn/...
@tedcruz Ted Cruz on x
A great move. Huawei is nothing more than global espionage operation thinly veiled as a telecom company. https://twitter.com/...
@whnsc NSC on x
The United States is making it harder for #Huawei to use our own technology against us, our Allies, and our partners. We will not allow Huawei to flout U.S. export control laws, exploit U.S. technology, and threaten our national security. https://twitter.com/...
@stephaniecarvin Stephanie Carvin on x
Can anyone at @Huawei_Canada remind me how they are a fully independent company and totally separate from the Chinese state again? Anyone? https://twitter.com/...
@carlbildt Carl Bildt on x
It didn't take long 🇺🇸🇨🇳. @globaltimesnews reports on “a tsunami of anger among Chinese officials” and different possible actions possibly including trowing Boeing out of the Chinese market. More to come, I fear. https://www.globaltimes.cn/...
@nytimes @nytimes on x
The Trump administration has issued new rules that will bar Huawei and its suppliers from using American technology and software, a significant escalation and one that will likely inflame tensions with Beijing https://www.nytimes.com/...
@indopac_info @indopac_info on x
The Commerce Department's rule, effective Friday but with a 120-day grace period, also hits Taiwan Semiconductor Manufacturing Co Ltd (http://2330.tw/), the biggest contract chipmaker and key Huawei supplier, which announced plans to build a U.S.-based plant on Thursday.
@wiredbusiness @wiredbusiness on x
The announcement comes as the Commerce Department issues new restrictions on sales to Huawei, the latest sign of US-China friction. https://www.wired.com/...
@teroterotero Tero Kuittinen on x
I don't think Wall Street quite comprehends that Trump actually is now escalating the China trade war in the middle of the biggest economic downturn since 1706. This is too surreal for investors to grasp. https://twitter.com/...
@b_fung Brian Fung on x
A Chinese state media official suggested China could investigate Apple and Cisco, or stop buying planes from Boeing, after the Commerce Department unveiled a new rule today targeting Huawei: https://www.cnn.com/...
@seanspicer Sean Spicer on x
Huawei is a threat to our national security and needs to be stopped — >> U.S. Delivers Another Blow to Huawei With New Tech Restrictions https://www.nytimes.com/...
@pstasiatech Paul Triolo on x
U.S. makers of semiconductors worry that the rules will slash their sales not only to Huawei but other Chinese firms, which might worry that the Commerce Department will next target them. Those firms may now look for non-American suppliers of technology, U.S. companies fear.
@globaltimesnews @globaltimesnews on x
The US companies mentioned, such as @Apple, @Qualcomm, @Cisco and @Boeing, are all highly dependent on the Chinese market. Punitive measures targeting large-sized US companies are the “nuke bomb,” according to analysts. https://www.globaltimes.cn/...
@secretaryross Sec. Wilbur Ross on x
This is not how a responsible global corporate citizen behaves. We must amend our rules exploited by Huawei and HiSilicon and prevent U.S. technologies from enabling malign activities contrary to U.S. national security and foreign policy interests. → https://www.commerce.gov/... …
@reptedyoho Ted Yoho on x
#Huawei has been & continues to be, a #NationalSecurity threat to the U.S. With a proven track record of #espionage & #intellectualproperty theft, U.S. govt must do what it can to limit their spread into nations we trust & devices we rely on. https://www.reuters.com/... @HouseGOP

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