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American Companies Like Intel May Sell Technology Supporting Current Huawei Products Until Mid August

2 min read

United States chip makers are still selling millions of dollars of products to Huawei despite a Trump administration ban on the sale of American technology to the Chinese telecommunications giant. Industry leaders including Intel and Micron have found ways to avoid labeling goods as American-made. Some people spoke on the condition they not be named because they were not authorized to disclose the sales. Goods produced by American companies overseas are not always considered American-made.

 

The components began to flow to Huawei about three weeks ago. Sales will help Huawei continue to sell products such as smartphones and servers. Therefore this may underscore how difficult it is for the Trump administration to blame companies that it considers a national security threat like Huawei. They also hint at the possible unintended consequences from altering the trade relationships that ties together the world’s electronics industry and global commerce.

The Commerce Department’s move to block sales to Huawei is by putting it on a so-called entity list. However this may set off confusion within the Chinese company and its many American suppliers. Many executives lacked deep experience with American trade controls. This lead to initial suspensions in shipments to Huawei until lawyers could puzzle out which products could be sent. Decisions about what can and cannot be shipped were also often run by the Commerce Department.
Some American companies may sell technology supporting current Huawei products until mid-August. But a ban on components for future Huawei products is already in place. It’s not clear what percentage of the current sales were for future products. The sales have most likely already totaled hundreds of millions of dollars. That surely is a big load. Intel and Micron did not comment about this.

 

Although the Trump administration has been aware of the sales, officials are split about how to respond. Some officials feel that the sales violate the spirit of the law and undermine government efforts to pressure Huawei. While others are more supportive because it lightens the blow of the ban for American corporations. Huawei has said it buys around $11 billion in technology from United States companies each year. A spokesman for the Commerce Department, in response to questions about the sales to Huawei, referred to a section of the official notice. The notice was about the company being added to the entity list, including that the purpose was to prevent activities contrary to the national security or foreign policy interests of the United States. The Idaho-based Micron competes with South Korean companies like Samsung to supply memory chips that go into Huawei’s smartphones.

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