A draft report by a government contractor shows that U.S. chipmaker Nvidia Corp’s plans to sell technology to China’s Huawei would fail if the U.S. government goes ahead with a plan to further limit shipments to the blacklisted company.
The Biden administration has been thinking about putting limits on what U.S. companies can ship to telecoms equipment giant Huawei Technologies Co. Huawei was put on a U.S. trade blacklist in 2019, but under a special plan put in place by the Trump administration, it still gets billions of dollars worth of U.S. goods.
“The proposed 2023 amendment of (the Commerce Department’s) licensing will likely have a high economic impact on Nvidia,” according to excerpts of the draft report seen by Reuters, referring to the company’s “pending license value.” No one knew before that Nvidia planned to sell to Huawei.
A spokesperson for Nvidia refused to say anything about the document, saying: “The China market gives the U.S. semiconductor industry a big chance to grow. We can’t say anything about pending license requests, but we work with customers and partners all over the world to follow all export rules and meet market needs.
A senior State Department official said that the document was a rough draft made by a contractor and that the department “would not have approved of the report in its current form.” It also said that the government “has written and paid for many different reports on this subject that come to very different conclusions based on different scenarios.”
Both the White House and the Commerce Department said they had nothing to say. Huawei didn’t answer when asked for a comment.
The document shows that the Biden administration wants to find out how proposed Huawei policy changes will affect U.S. companies before putting in place new rules that could hurt projected revenue streams at a time when the tech industry is already struggling. It also gives unusual information about which U.S. companies want to do business with Huawei, one of the Chinese companies that Washington has punished the most.
Reuters couldn’t find out more about the policy change whose effects were being looked at in the report. The report said that the change in policy would likely have a “moderate effect” on Qualcomm’s economy, while Huawei would likely be hurt more. In fact, the report said that Huawei would be hit harder by losing access to Qualcomm’s modem chips because Huawei “depends heavily on Qualcomm’s modem chips to support its smart phone offering.”
- Yet, Investors And Traders In Stocks Are Ignoring The Bonds’ Blaring Alarms
- Ghana Didn’t Pay Its Interest On Time, Which Made The Default Coverage Pay Out
Qualcomm did not respond to a request for comment.
Reuters reported in 2021 that U.S. officials had approved license applications worth hundreds of millions of dollars for Huawei to buy chips for its growing business in auto parts, such as video screens and sensors, even though trade restrictions were hurting other business lines.
In 2019, Huawei was put on a “entity list” because of concerns that it could spy on Americans and because of claims that it stole intellectual property and broke sanctions. When selling goods made in the U.S. to a company on the list, suppliers must get a special license, which is usually denied. But the Trump administration made an exception for Huawei. It stopped the company from getting 5G chips but let it get other things, like 4G chips.
The Commerce Department’s top export controls official, Alan Estevez, said this week the Trump-era policy allowing U.S. technology below the “5G level” to be shipped to Huawei was “under assessment.”
But sources say that there are disagreements within the administration about how far to go: some officials want to block all licenses to Huawei suppliers and revoke existing permissions, while others want to limit restrictions to 4G chips and other targeted technologies going forward.
If The U.S. Tightens Restrictions On Huawei, Nvidia’s Plans To Sell To Huawei Could Be In Jeopardy)
