U.S. Chip Manufacturers Block Component Supply to Huawei

Semiconductor manufacturers

The world’s biggest chipmakers, including Qualcomm Inc., Intel Corp., and Broadcom Inc., have informed their workforce that it should stop supplying Huawei Technologies Co. Ltd. before the Trump administration’s next announcement, said people familiar with the matter.

The supply of hardware and software solutions from Google has currently stopped at Huawei, they added.

On Friday, U.S. authorities added the Chinese tech giant to the blacklist and menaced it from the supply chain of U.S. software and semiconductors, which it requires the most. The ban is likely to restrict the world’s biggest networking gear provider and smartphone maker.

The ban is impacting not only Huawei but also its influence spread outside of the U.S. and Asia. Infineon Technologies AG, a German semiconductor manufacturer, also reported a fall in its early trading after it cut-off its supply to Huawei, the rouse of the U.S. ban, the media reported. French-Italian semiconductor company STMicroelectronics also reported a drop in its share price.

According to a statement, Huawei said that it will continue to provide sales services and updates to customers.

Obstructing vital components supplied to Huawei could potentially cause disturbing operations by U.S. chip giants including Micron Technology Inc. The move would also delay the launch of 5G wireless networks across the world. It could also be harmful to those companies which are growingly dependent on Chinese economic structure in terms of development.

Intel is the leading supplier of server chips whose work deals with Chinese companies, whereas Qualcomm provides them with processors and modems for Huawei’s smartphones and Chinese firms, and purchases programmable chips from Xilinx. Broadcom sells switching chips used as a critical component in networking machinery.

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