US gives Huawei 90-day reprieve
On May 16 the bureau increased the trade-war pressure on China by adding Huawei Technologies Co. Ltd. and 68 affiliates to the Entity List under the Export Administration Regulations (EAR). This list is for those entities that the US government claims it has reasonable cause to believe have been involved in activities contrary to the national security or foreign policy interests of the United States.
On May 20 the bureau said it had created a 90-day temporary general license that partially restores the licensing requirements and policies under the Export Administration Regulations (EAR). Meanwhile a slew of companies are reported to have said that they are complying with the ban in various ways including Google, Intel, Qualcomm, Xilinx, Qorvo, Broadcom, ARM, Infineon, Toshiba, Panasonic but not yet foundry supplier TSMC.
As the leading communications equipment supplier in the world Huawei has a leading position in the roll out of 5G communications which will be vital for autonomous vehicles, smart cities and smart homes. Huawei’s ability to interfere with or disrupt networks once deployed and even collect data from them is seen as a strategic issue by the United States government. The government has been trying to persuade other countries not to buy networking equipment for 5G from Huawei.
Huawei is also a fast rising third placed smartphone maker behind Apple and Samsung which means its chip buying is important to European suppliers such as AMS, STMicroelectronics, Dialog Semiconductor and Infineon. Huawei bought $21.1 billion of chips in 2018 up from $14.6 billion in 2017.
Huawei has been reported to have been stockpiling components against the possibility of an embargo.
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