Component manufacturers have found a way around the limitation.
Many major US chip makers, including Intel and Micron, continued to work with Huawei, despite the ban of the US Department of Commerce. Companies shipped components for millions of dollars after the introduction of restrictions. About this on condition of anonymity told The New York Times four sources close to the deals.
According to the interlocutors of the newspaper, deliveries resumed in early June. As explained in the NYT, US companies took advantage of the fact that goods produced abroad are not always considered to be made in the United States.
Kevin Wolf, a former official of the Ministry of Commerce and a partner at Akin Gump law firm, told reporters that he had advised several Huawei contractors. He confirmed that adding to the “black” list did not prevent companies from working with Huawei, but only as long as the products are manufactured outside the United States.
For example, contractors may collect chips for a Chinese company if they are not made in America and do not threaten national security. At the same time, there are restrictions on such sales: if the manufacturer provides service or support for products in the US, then Huawei can no longer sell them, regardless of the country of assembly.
According to Wolf, this cannot be considered a “loophole” because there is no ambiguity in the law. At the same time, he noted that some companies were ready to move production and maintenance of components to other countries in order to continue cooperation with Huawei.
As the journalists explained, companies are at risk, including in the struggle for a large customer. For example, Micron from Idaho manufactures memory chips for Huawei, but Korean Samsung and SK Hynix are also successfully operating in this niche. In the event that Micron refuses to supply components, it will easily be replaced by competitors.
According to the NYT interviewees, US contractors were not ready to add Huawei to the black list and did not know what to do. Just in case, they suspended deliveries before consulting with lawyers.
As a result, the decision to sell could be made at the US Department of Commerce. According to the law, it is allowed to deliver only components for already released devices until mid-August, and a ban is imposed on future ones.
The interlocutors of NYT said that after the ban, total sales of components amounted to “hundreds of millions of dollars.” Prior to that, Huawei claimed that they buy $ 11 billion worth of products from American companies annually.
In May 2019, the US Department of Commerce put Huawei on the black list, banning American companies from working with it. After that, some contractors, including Google and ARM , began to publicly break relations with the corporation.
A month later, Huawei lowered the order for assembling smartphones from the contractor Foxconn, sold the business of submarine Internet cables, and also refusedto launch a new model MateBook and postponed the release of the Mate X smartphone with a flexible screen. In addition, the company lowered its revenue forecast by $ 30 billion.
June 22, Huawei announced three new smartphones, despite the sanctions. The company did not disclose the start date of their sales in countries other than China and did not tell whether they would work on Android.