Joe Biden’s government is considering removing Huawei from US suppliers entirely
The Biden Administration is considering cutting off Huawei’s access to all of its US suppliers, including Intel and Qualcomm, at a time when the United States intensifies its crackdown on the Chinese tech sector.
Sales by US firms to Huawei have been limited for four years, since former President Donald Trump added the Shenzhen, China-based company to the so-called US “Entity List” due to national security concerns. Since then, US suppliers have required government approval to sell to the telecommunications equipment giant.
Now some Biden Administration officials are advocating ban all sales to Huaweilong suspected of having ties to the Beijing government and the Chinese military, as the administration debates whether and how to adjust its furlough policy, according to people familiar with the matter.
The people asked not to be named because a decision has not been made.
Tensions with China have been rising throughout Joe Biden’s presidency as Republicans who control the House press him to continue to pressure Beijing, particularly to limit the country’s technological advances. Last week, the Biden administration convinced the Netherlands and Japan to join the US in restricting exports of advanced semiconductor manufacturing machinery to China.
Beijing “is seriously concerned by the report”Chinese Foreign Ministry spokeswoman Mao Ning told a regular press conference in Beijing on Tuesday. “China strongly opposes the United States abusing state power to hinder Chinese companies by stretching the concept of national security,” she said, adding that the Asian nation would protect its companies without saying how.
Huawei was once one of the world’s largest buyers of electronic components and a very important part of the supply chain due to its position in the mobile phone and network equipment industries. Trump’s ban on certain sales wiped out huge amounts of revenue for a group of companies, including Broadcom.
But the Department of Commerce continued to allow the supply of other products to Huawei. The company remains a $100 billion giant leading the expansion of the world’s largest 5G network in its own country, while helping build critical broadband from Africa to the Middle East. In December, the firm declared that “business as usual” after successfully circumventing US technology sanctions.
Under the new policy advocated by some officials, all license applications to supply the company would be denied. Meanwhile, most current applications for new licenses are languishing in a stalled approval process, the people said, creating a de facto gridlock.
The long-term impact of this measure on Huawei is uncertain. It continues to rake in huge revenue from local wireless carriers like China Mobile and state-owned companies that rely on Huawei to build local and corporate networks. China operates more than 2 million 5G base stations, or more than 60% of the world’s total, according to industry officials.
Huawei has also been stockpiling foreign components, such as chips, and seeking alternatives to American circuitry.. Company representatives did not immediately respond to requests for comment.
Intel and Advanced Micro Devices (AMD) supply Huawei with the processors it uses in its Mate range of laptops, while Qualcomm it sells Huawei processors and modems that are the building blocks of its narrow range of smartphones.
Spokesmen for the National Security Council and the Commerce Department did not immediately respond to requests for comment. Representatives for Intel, Qualcomm and AMD declined to comment.
People familiar with the matter said that it is not clear how long the Administration could act in relation to a policy change. They warned that the talks were at an early stage, with some of them saying that the timing of a decision could coincide with the fourth anniversary of Huawei’s listing of entities in May.
Shutting down sales to Huawei would not be as devastating to American companies as it once was. The Chinese company has divested much of its smartphone business, mostly offering only lower-bandwidth 4G phones under its own name, and has seen its brand damaged by the US campaign against it.
To underscore the decline in its importance, Huawei accounts for less than one percent of the revenue of Qualcomm, Intel and AMDbased on a supply chain analysis of Bloomberg.
(With information from Bloomberg)