Nvidia may not have time to sell Huawei due to U. S. sanctions
2023.03.04 01:23
Nvidia may not have time to sell Huawei due to U. S. sanctions
By Tiffany Smith
Budrigannews.com – Chip manufacturer Nvidia (NASDAQ:) According to a draft report by a government contractor, Corp’s plans to sell technology to China’s Huawei would be thwarted if the U.S. government pursues a proposal to further restrict shipments to the blacklisted company.
Although Huawei Technologies Co. was added to a U.S. trade blacklist in 2019, the telecom equipment giant continues to receive billions in U.S. goods under a special plan implemented by the Trump administration. The Biden administration has been considering restricting the items it authorizes U.S. companies to ship to Huawei Technologies Co.
According to excerpts of the draft report seen by Reuters, “The proposed 2023 amendment of (the Commerce Department’s) licensing will likely have a high economic impact on Nvidia” refers to the company’s “pending license value.”
The plans of Nvidia to sell to Huawei have not been reported previously.
A spokesperson for Nvidia said, “Nvidia declined to comment on the document.” The Chinese market is a huge opportunity for the semiconductor industry in the United States. We collaborate with customers and partners worldwide to comply with all applicable export controls and satisfy market demand, but we are unable to comment on any pending license requests.
The document was a contractor’s preliminary draft, according to a senior State Department official, and the department “would not have approved of the report in its current form.” In addition, it stated that the government “has written and contracted multiple reports on this subject, based on different contingencies, which arrive at very different conclusions.” These reports were cited.
The Commerce Department and White House declined to comment. A request for clarification was not received from Huawei.
According to the document, the Biden administration is trying to figure out how proposed changes to Huawei’s policy will affect American businesses before imposing new rules that could hurt projected revenue streams at a time when the tech industry is already struggling. In addition, it provides unusual insight into the politically contentious issue of which American companies are seeking business ties to Huawei, one of the Chinese companies that Washington has penalized the most.
According to the report, Qualcomm (NASDAQ:) in contrast to Huawei, would likely experience a “moderate economic impact” from the policy change. Since Huawei “relies heavily on Qualcomm’s modem chips to support its smart phone offering,” the report predicted that losing access to Qualcomm’s modem chips would have a greater impact on Huawei.
As trade restrictions crippled other business lines, Reuters reported in 2021 that U.S. officials had approved license applications worth hundreds of millions of dollars for Huawei to purchase chips for its expanding auto component business, including vehicle components like video screens and sensors.
In 2019, there were claims that Huawei was stealing intellectual property and breaking sanctions, which led to the company’s inclusion on the “entity list.” When selling U.S. goods to companies on the list, suppliers are required by the United States to apply for a special license, which is typically refused. However, Huawei was granted access to 5G chips by the Trump administration, but other items like 4G chips could be shipped to the company.
Alan Estevez, the top official in charge of export controls at the Commerce Department, stated this week that the Trump administration’s policy of allowing U.S. technology below the “5G level” to be shipped to Huawei was “under evaluation.”
However, according to sources, the administration odds differ on how far they want to go: While some officials want to limit future restrictions to 4G chips and other targeted technologies, others want to block all licenses for Huawei suppliers and revoke existing authorizations.
