The US, today, moved to block global semiconductor companies from being able to ship to Huawei Technologies.
Obviously, this is going to ramp up tensions with China, where tensions were already high from the US Commerce department putting Huawei on the entity list last year. Blocking the company from working with any US firm.
Now, Huawei is unable to work with any semiconductor company, thanks to this latest block by the US government.
This is an amendment to a current export rule against Huawei
The Commerce department said on Friday that this was an amendment to an export rule that "strategically target Huawei's acquisition of semiconductors that are the direct product of certain US software and technology."
This new rule will "cut off Huawei's efforts to undermine US export controls".
Semiconductors are used in just about every piece of electronics in the world. It's essentially the brains of the product. From smartphones to tablets, to air conditioners, to remote controls and everything in between. So this move really hurts Huawei. Even though Huawei makes its own semiconductors, it does work with other companies to get these chips off the ground and as good as they are.
TSMC, Apple and Qualcomm are also greatly affected
While Huawei is going to be the most affected by this new rule, as the world's second-largest smartphone maker. It's not alone.
This new rule also greatly affects TSMC (Taiwan Semiconductor Manufacturing Co Ltd). Which manufacturers chipsets for Huawei, and many other companies.
It also affects Apple and Qualcomm, though to a lesser extent. Even though Qualcomm and Huawei couldn't really work together, there was a proxy available for working together, through a third company not located in the US. Now, that can't happen.
TSMC also stated on Thursday that it was going to build a $12 billion semiconductor factory in Arizona, that plan might change now. However, TSMC did not comment on the US moves against Huawei on Friday.
As mentioned, chipsets are very essential for Huawei and really any tech company. They are used in every single piece of electronics ever made. And Huawei uses its own HiSilicon in its smartphones as well in its telecom equipment. Which deals a major blow to the company. While it did find a way around not using Google apps, for now. It's unclear if they will be able to find a way around not being able to make semiconductors. As they do need to collaborate with other companies like ARM to get these chipsets made and manufactured.