The U.S. seeks to make Huawei unable to produce smartphones

It seems that the current US ban on Huawei is ineffective, so the US government is looking for another way to "eradicate" the Chinese company.

According to Reuters, the Trump administration is reviewing changes to US regulations and policies. These changes will allow them to block chipmakers, including TSMC (a Taiwanese company), from shipping products to Huawei . At US high-level meetings this week and next week, new restrictions on doing business with Huawei in China are among the options to discuss

A source said the chip ban proposal is currently in draft but not yet approved. Another source said that the US government's purpose is to ensure that Huawei is not provided with any chip source that they can control.

Can the US hurt Huawei?

Huawei is at the center of a global battle to dominate the United States and China. The US is trying to persuade allies to exclude Huawei equipment from the 5G network on the grounds that its device could pose a security risk, while the Chinese manufacturer has repeatedly denied the allegations.

In order to hurt the Chinese manufacturer's chip supply chain, relevant US departments will amend the Foreign Direct Product rule. The new law will include products made by foreign countries, partly using US technology or software within U.S. regulations.

Under the draft proposal, the US government will force foreign companies using US chip manufacturing equipment to have a US license before supplying products to Chinese manufacturers. This is a significant expansion of export control power and may infuriate US global allies.

Neither Huawei nor TSMC responded to requests for comment on the content of rules that the United States may issue. A report published by China Everbright Securities last year showed that most chipmakers rely on equipment manufactured by US companies such as KLA, Lam Research and Applied Materials. Meanwhile, China doesn't have a production line that uses only Chinese-made equipment, so it's difficult to make any chipset without American equipment.