The Trump administration on Friday moved to block shipments of semiconductors to Huawei Technologies from global chipmakers, in an action that could ramp up tensions with China according to Reuters.
The U.S. Commerce Department said it was amending an export rule to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.”
Reuters first reported the news ahead of the department’s release. The department said its “announcement cuts off Huawei’s efforts to undermine U.S. export controls.”
The rule change is a blow to Huawei, the world’s no. 2 smartphone maker, as well as to Taiwan’s Taiwan Semiconductor Manufacturing Co Ltd a major producer of chips for Huawei’s HiSilicon unit as well as mobile phone rivals Apple Inc and Qualcomm Inc .
TMSC announced late Thursday it would build a $12 billion chip factory in Arizona. TSMC did not immediately comment Friday.
Huawei, which needs semiconductors for its widely used smartphones and telecoms equipment, is at the heart of a battle for global technological dominance between the United States and China.
Huawei, which has warned that the Chinese government would retaliate if the rule went into effect, did not immediately comment on Friday. U.S. stock market futures turned negative on the Reuters report.
