Recently, the U.S. government has been trying to take down the Huawei’s Market in the U.S. and also its banning Huawei from using the android and Google Softwares. However, Huawei’s revenue increased by more than 19% last year. The U.S didn’t expect this, and it is now taking more extreme measures against Huawei.
The U.S. Department of Commerce announced their plans to amend the “Foreign Direct Product Rule” on last Friday, which states that when products are manufactured outside the United States but uses U.S. technology, they are U.S. “direct products” and are therefore subject to U.S. jurisdiction for export Regulations.
If the rule change comes to live, Huawei will no longer be able to purchase chips from Taiwan’s TSMC. TSMC uses equipment from American companies like Applied Materials and Teradyne to manufacture chips for Huawei. To continue cooperation with Huawei, TSMC needs to seek permission from the US government. nevertheless, we all know that it will not get approval.
THE NEW DECISION MAY QUESTION THE CHIPMAKERS
The new U.S. rules may force chipmakers to choose from the options put forwarded. The first one will be to cut off all business links with Chinese technology companies. However, the second option will be to stop using U.S. equipment to make chips. This will undermine the global technology ecosystem, and potentially undermine the US leadership in the semiconductor industry. In summary, the U.S. is biting its own back in the long run.
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