Huawei measures may spark slide in US chip development
DONALD TRUMP’S crackdown on Huawei using American technology risks backfiring by moving more research and development to China, the semiconductor industry has warned.
The White House has announced plans to cut off Huawei’s access to high-end microchips by banning companies that supply them from using advanced US equipment and software.
The rules, which were announced in May and are due to come into force in September, affect companies such as the giant Taiwanese manufacturer TSMC, which supplies chips to Huawei using US equipment.
They are designed to strike at the heart of the Chinese company’s supply chain, which still relies on US semiconductor expertise.
However, the Semiconductor Industry Association (SIA), the trade body that represents companies including
Intel, Qualcomm and Nvidia, said the crackdown would encourage development of technology abroad and mean the US is left behind in technologies such as 5G.
In a submission to the US commerce department consultation about the rules, it said: “The new rule has created a structural incentive for designated entities [such as Huawei] to fund the development and production of new merchant items by competitors of US companies.
“This income, which is not available to US companies, will further fund the R&D of the foreign companies, which increases their ability to out-compete the US companies in critical technologies such as 5G.”
TSMC, the world’s biggest microchip manufacturer, has said it will stop supplying Huawei with chips as a result of the order.
China is investing billions in developing sovereign capability in semiconductors, and has made self-sufficiency a national priority.
In May, US commerce secretary Wilbur Ross said this “indigenisation effort” was still reliant on US technology.
The SIA said the new US rules appeared vague and created significant uncertainty for US businesses attempting to comply with it.
Wilbur Ross, the US secretary of commerce, has proved central in America’s approach to Chinese tech