Huawei Suppliers Enjoy Three Months of Breathing Room

The U.S. Commerce Dept. has given suppliers of chips and components to Huawei Technologies a 90-day reprieve in the form of a temporary license that will enable them to keep selling parts to Huawei through Aug. 20.

The Bureau of Industry and Security (BIS) has granted suppliers a temporary general license to continue selling to Huawei for 90 days, subject to certain conditions.

The BIS ruling follows the Commerce Dept. decision announced last week to place Huawei and 68 of its international subsidiaries on an export control list that restricts the ability of U.S. firms to supply most tech-related items. Placement of Huawei on the so-called Entity List would likely all but halt its ability to buy chips and other components from U.S. suppliers.

U.S. Commerce Secretary Wilbur Ross said in a statement that the license would give operators time to make other arrangements the Commerce Dept. considers “the appropriate long term measures for Americans and foreign telecommunications providers that currently rely on Huawei equipment for critical services.”

Huawei spent $26 billion on chips in 2018, according to Gartner; and 70 companies — including AMD, Intel, Microsoft and Qualcomm — have exposure to Huawei, Goldman Sachs reports.

U.S. chip makers Broadcom, Intel and Qualcomm qualify as small-to-midsized suppliers to Huawei. Of the 52.4 billion Chinese Renminbi (Rmb) Huawei spent in Q3 2018, Broadcom accounted for 2.1 billion; Qualcomm, 1.6 billion; and Intel 0.6 billion, according to Goldman Sachs. Foxconn Industrial Internet Co. sold Rmb 9.1 billion worth of products and services to Huawei during that period and TSMC, 3.8 billion.

The Commerce Dept. said it added Huawei to the Entity List after concluding that the company is engaged in activities that are contrary to U.S. national security or foreign policy interests, including alleged violations of the International Emergency Economic Powers Act (IEEPA) by providing prohibited financial services to Iran. The department also concluded that Huawei engaged in obstruction of justice in connection with the investigation of alleged violations of U.S. sanctions.

For the rest of this article, see EETimes.

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