U.S. Chipmakers Are Low-Key Fighting Against Huawei Ban

Huawei
A Huawei company logo is seen at a shopping mall in Shanghai, China June 3, 2019. Picture taken June 3, 2019. (Photo: REUTERS/Aly Song/File Photo)

Several top American chipmakers reportedly united for a meeting with the U.S. Commerce Department in May in hopes of appealing for an ease-up on the ban against Chinese tech behemoth Huawei.

Sources with knowledge of the matter told Reuters that Xilinx Inc. and Intel executives attended the meeting to ask the U.S. government to ease up on restrictions against the Chinese tech provider.

According to three sources, the union of U.S. chipmakers argued that aside from 5G network equipment, Huawei's other technological products are unlikely to pose security threats to Washington and other sovereign bodies.

Four other sources revealed that Qualcomm has also approached the Commerce Department regarding the issue. The chip giant said it wants to keep supplying chips to Huawei for non-5G network projects such as smartphones and smartwatches.

It is worth noting that the White House released its Huawei blacklisting order shortly after it negotiations for a potential trade deal with China fell apart. The ban has since caused a chaotic stir among American brands collaborating with the Chinese company.

Industry experts said the unity of U.S. chipmakers to find a strategy that will not put American companies in a bind due to the Huawei ban is not surprising. After all, the latter has been making significant purchases from U.S. firms.

"For technologies that do not relate to national security, it seems they shouldn't fall within the scope of the order. And we have conveyed this perspective to government," vice president of global policy at the Semiconductor Industry Association (SIA), Jimmy Goodrich, pointed out.

The organization has also confirmed that it approached the White House for the purpose of letting the government know about the impact of the Huawei ban on U.S. companies, specifically in the tech sector.

Before news about the rallying of American chipmakers against the Huawei blacklisting emerged, rating expert, S&P already warned the White House about the ban's impact on U.S. tech circles.

The agency noted that the blacklisting will most likely push the Chinese government to invest heavily on the country's technologies, further stalling potential projects between American firms and Chinese tech providers.

"In turn, this could heighten competition in the technology sector and potentially lower the long-term growth prospects of US technology firms," S&P said in its warning.

The agency further explained that effects on the semiconductor industry in the U.S. will be long-term since Huawei is among their major clients. Qorvo, Lumentum, and Micron, for example, are just some of the American firms relying on the Chinese tech giant for purchases of up to 15 percent of their overall revenue.

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