U.S. may further crimp Huawei's global chip supply

As tensions between Washington and Beijing increase, with both pointing fingers at the other for the spread of coronavirus, the U.S. is now stating that foreign companies utilizing U.S. chipmaking equipment must secure a U.S. license before supplying certain chips to Huawei, Reuters is reporting. One of the unnamed sources said the restrictions apply to new, technologically more sophisticated chips not the more widely-used and commoditized semiconductors that have been on the market for some time. Chip manufacturers largely rely on equipment produced by domestic companies including KLA Corp, Lam Research, and Applied Materials, according to a report issued in 2019 by China’s Everbright Securities. The equipment makers offered no response to Reuters requests for comment. Reportedly, the recent decision on new measures resulted from a meeting by heads of various agencies who agreed on Wednesday make changes to the Foreign Direct Product Rule, which subjects certain non-domestic-manufactured goods using U.S. technology or software to U.S. regulations, the Reuters sources said. It is unknown at this time whether President Trump will sign off on the new restrictions.