U.S. hits Huawei with new tech restrictions

The Trump administration issued new rules Friday that will bar Huawei and its suppliers from using U.S. technology and software, a significant escalation in its battle with the Chinese telecom giant and one that will likely inflame tensions with Beijing.

The rule changes will prevent companies from selling chips to Huawei that are made with U.S. manufacturing equipment or based on designs that are the product of U.S. software and technology, the Commerce Department said. Companies can apply for a license to continue supplying products to Huawei, but the administration said the presumption will be to deny those requests.

While the restrictions could have sweeping implications, semiconductor industry executives and analysts said they were still waiting to analyze the detailed text of the rule, which was expected to be released Friday afternoon.

The move seemed aimed at inflicting further damage on Huawei, which continues to rely on U.S.-made machinery and software designs to make the chips for its smartphones and tablets. The Trump administration has singled out Huawei as a threat to national security, saying that its gear should not be trusted because it is beholden to the Chinese government, an accusation the company has denied.

The move came shortly after an announcement Thursday night that TSMC — a key Huawei supplier — had agreed to build a $12 billion manufacturing facility in Arizona, in a response to the Trump administration’s concerns about the security of the global electronics supply chain.