The U.S. Commerce Department announced a pair of moves this morning designed to put more pressure on Huawei. The Department extended the Temporary General License that enables U.S. companies to transact business with the Chinese communications technology vendor for another 90 days but warned this extension likely would be the last. In a more aggressive move, Commerce announced changes to the foreign-produced direct product rule and the Entity List on which it placed Huawei in May 2019 that it hopes will hamper the company’s efforts to develop alternatives to U.S. semiconductors it is barred from accessing.
This latter effort contains a pair of rules changes that could not only affect Huawei but third-party semiconductor manufacturers. The first change requires a special license be obtained before the direct use of “certain U.S. Commerce Control List (CCL) software and technology” in the development of semiconductor designs produced by Huawei and any of 114 affiliates such as HiSilicon that are part of the Entity List restrictions. The second similarly restricts the use of “certain CCL semiconductor manufacturing equipment” to produce semiconductors based on Huawei and HiSilicon designs, even if this equipment is located outside the United States. This second restriction is aimed at preventing Huawei from using outside foundries that rely on U.S. semiconductor production technology, such as TSMC, to produce communications semiconductors for the Chinese firm.
The order gives such foundries 120 days to clear out Huawei/HiSilicon chips that are already in their production pipelines.
“Despite the Entity List actions the Department took last year, Huawei and its foreign affiliates have stepped-up efforts to undermine these national security-based restrictions through an indigenization effort. However, that effort is still dependent on U.S. technologies,” said Secretary of Commerce Wilbur Ross. “This is not how a responsible global corporate citizen behaves. We must amend our rules exploited by Huawei and HiSilicon and prevent U.S. technologies from enabling malign activities contrary to U.S. national security and foreign policy interests.”
Time to move
In extending the Temporary General License, Commerce warned U.S. communications services providers who still haven’t replaced their Huawei equipment with alternatives from other vendors that they have until August 13, 2020, to do so or risk having to apply for special licenses to keep working with the company. The announcement comes after the close of a comment period on the matter the Commerce Department launched this past March (see “Department of Commerce looking for input on Huawei Temporary General License extensions”). The Department heard from “numerous companies, associations, and individuals,” according to a press statement that did not summarize the responses.
“The Department continues to assess the national security and foreign policy implications of companies and individuals that have not yet transitioned from Huawei equipment,” Commerce added.
Meanwhile, President Donald Trump on May 14 extended for a year an executive order issued in May 2019 that bars U.S. firms from buying telecommunications equipment made by companies deemed national security risks. The list of such companies includes Huawei and ZTE.
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Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
You can connect with Stephen on LinkedIn as well as Twitter.