US tightening restrictions on Huawei access to technology

US Secretary of Commerce Wilbur Ross in Washington. (AFP/File)
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Updated 18 August 2020

US tightening restrictions on Huawei access to technology

  • The new rule makes it clear that any use of American software or American fabrication equipment is banned and requires a license, says US Commerce Secretary Wilbur Ross

ZURICH: The Trump administration announced on Monday it will further tighten restrictions on Huawei Technologies Co., aimed at cracking down on its access to commercially available chips.

The US Commerce Department actions, first reported by Reuters, will expand restrictions announced in May aimed at preventing the Chinese telecommunication giant from obtaining semiconductors without a special license — including chips made by foreign firms that have been developed or produced with US software or technology.

The administration will also add 38 Huawei affiliates in 21 countries to the US government’s economic blacklist, the sources said, raising the total to 152 affiliates since Huawei was first added in May 2019.

Commerce Secretary Wilbur Ross told Fox Business the restrictions on Huawei-designed chips imposed in May “led them to do some evasive measures. They were going through third parties,” Ross said. “The new rule makes it clear that any use of American software or American fabrication equipment is banned and requires a license.”

Secretary of State Mike Pompeo said the rule change “will prevent Huawei from circumventing US law through alternative chip production and provision of off-the-shelf chips.” He added in a statement “Huawei has continuously tried to evade” US restrictions imposed in May.

With US-China relations at their worst in decades, Washington is pushing governments around to world to squeeze Huawei out, arguing it would hand over data to the Chinese government for spying. Huawei denies it spies for China.

The new actions, effective immediately, should prevent Huawei’s attempts to circumvent US export controls, Commerce said.

It “makes clear that we’re covering off-the-shelf designs that Huawei may be seeking to purchase from a third-party design house,” one Commerce Department official told Reuters.

A new separate rule requires companies on the economic blacklist to obtain a license when a company like Huawei on the list acts “as a purchaser, intermediate consignee, ultimate consignee, or end user.”

The department also confirmed it will not extend a temporary general license that expired Friday for users of Huawei devices and telecommunication providers. Parties must now submit license applications for transactions previously authorized.

The Commerce Department is adopting a limited permanent authorization for Huawei entities to allow “ongoing security research critical to maintaining the integrity and reliability of existing” networks and equipment.

Existing US restrictions have already had a heavy impact on Huawei and its suppliers. The May restrictions do not fully go into effect until Sept. 14.

On Aug. 8, financial magazine Caixin reported Huawei will stop making its flagship Kirin chipsets next month due to US pressure on suppliers.

Huawei’s HiSilicon division has relied on software from US companies such as Cadence Design Systems Inc. and Synopsys Inc. to design its chips and outsourced the production to Taiwan Semiconductor Manufacturing Co. (TSMC), which uses equipment from US companies.

TSMC has said it will not ship wafers to Huawei after Sept. 15. 


Big week for Big Tech as earnings, hearings loom

Updated 25 October 2020

Big week for Big Tech as earnings, hearings loom

  • The four giants drawing the most scrutiny — Apple, Amazon, Facebook and Google — have been wildly successful in recent years

SAN FRANCISCO: Big Tech is bracing for a tumultuous week marked by quarterly results likely to show resilience despite the pandemic, and fresh attacks from lawmakers ahead of the Nov. 3 election.

With backlash against Silicon Valley intensifying, the companies will seek to reassure investors while at the same time fend off regulators and activists who claim these firms have become too dominant and powerful.

Earnings reports are due this week from Amazon, Apple, Facebook, Microsoft, Twitter and Google-parent Alphabet, whose combined value has grown to more than $7 trillion.

They have also woven themselves into the very fabric of modern life, from how people share views and get news to shopping, working, and playing.

Robust quarterly earnings results expected from Big Tech will “highlight the outsized strength these tech behemoths are seeing” but “ultimately add fuel to the fire in the Beltway around breakup momentum,” Wedbush analyst Dan Ives said in a note to investors.

The results come amid heightened scrutiny in Washington of tech platforms and follow a landmark antitrust suit filed against Google, which could potentially lead to the breakup of the internet giant, illustrative of the “techlash” in political circles.

Meanwhile, Senate Republicans have voted to subpoena Jack Dorsey and Mark Zuckerberg, the chief executives of Twitter and Facebook respectively, as part of a stepped-up assault on social media’s handling of online political content, notably the downranking of a New York Post article purported to show embarrassing information about Democrat Joe Biden.

CEOs of Twitter, Facebook and Google are already slated to testify at a separate Senate panel on Wednesday examining the so-called Section 230 law, which offers liability protection for content posted by others on their platforms.

The four giants drawing the most scrutiny — Apple, Amazon, Facebook and Google — have been wildly successful in recent years and have weathered the economic impact of the pandemic by offering needed goods and services.

Google and Facebook dominate the lucrative online ad market, while Amazon is an e-commerce king.

Apple has come under fire for its tight grip on the App Store, just as it has made a priority of making money from selling digital content and services to the multitude of iPhone users.

The firms have stepped up lobbying, spending tens of millions this year, and made efforts to show their social contributions as part of their campaign to fend off regulation.

“For the most part, tech companies know how to do this dance,” said analyst Rob Enderle of Enderle Group.

“They don’t spend a lot of time bragging about how well they have done any more.”

Ed Yardeni of Yardeni Research said the outlook for Big Tech may not be as rosy as it appears.

“For one, regulators at home and abroad are gunning to rein in some of the largest US technology names,” Yardeni said in a research note.

Of interest to the market short-term will likely be whether backlash about what kind of content is left up and what is taken down by online titans causes advertisers to cut spending on the platforms.

Economic and social disruption from the pandemic also looms over tech firms, which benefitted early in the pandemic as people turned to the internet to work, learn, shop and socialize from home.

“Performance will be best for those providing solutions for people working at home,” analyst Enderle said.

Amazon, Google and Microsoft each have cloud computing divisions that have been increasingly powering revenue as demand climbs for software, services and storage provided as services from massive datacenters.

Amazon has seen booming sales on its platform during the pandemic, and viewing surge at its Prime streaming television service.

Enderle expressed concern that with the coronavirus disease (COVID-19) cases and a lack of new stimulus money in the US, tech companies could reveal in forecasts that they are bracing for poorer performance in the current quarter.