New Huawei Restrictions Will Lead to 'Substantial Uncertainty,' Semiconductor Industry Group Says

The Commerce Department’s recent restrictions against Huawei could “create substantial uncertainty and disruption” for the semiconductor supply chain, leading to lost sales and an eroding customer base for U.S.-origin goods, a semiconductor manufacturing industry group said Aug. 24. Semi asked Commerce to extend the deadline for the savings clause in its Aug. 17 rule and review licenses for non-5G items with “significant flexibility.”

The rule, which expanded restrictions on foreign sales of chips to Huawei containing U.S technology, caught the semiconductor industry off guard and has sparked concerns of significant short-term trade disruptions (see 2008210045). Semi said Commerce should extend the rule’s savings clause by 120 days and “ensure predictable and timely license decisions for all items.” The group also asked the agency to be lenient when reviewing license applications for devices below the 5G level. In the rule, Commerce said it will review those applications on a case-by-case basis instead of a presumption of denial. BIS did not comment.

Semi also said it is concerned about the broader direction of the administration’s policy decisions, saying lost sales and revenue from Commerce restrictions could hamper U.S. research and development. “We also urge the administration to pursue policies with fewer unintended consequences and damage to U.S. technology leadership,” Semi said. “Lost global revenue will lead to a decrease in R&D, undermining U.S. semiconductor innovation and thereby harming national security.” Commerce actions also “further incentivize efforts to supplant ... U.S. technologies,” with global customers going away from U.S. supply chains deemed unreliable due to the restrictions.