U.S. companies continue to sell components to Huawei despite Trump ban: report

According to an article by the New York Times, U.S chip makers are still selling millions of dollars of components to Huawei despite U.S. President Donald Trump’s ban.

While companies like Google have claimed that Huawei’s operating system might pose more of a security threat, others in the industry, particularly the chipmakers, have been actively selling parts to the Chinese telecom giant under the existing ban.

Citing four unnamed sources familiar on the sale, the NY Times writes that leading U.S. based chip makers such as Intel and Macro are believed to sell components without labelling it as American-made.

Goods made by the American companies overseas aren’t considered American-made, and will not violate the existing U.S. trade regulation, the article noted. These foreign made parts shipped to Huawei in early June, right after the initial wave of trade bans on the Chinese telecom giant.

Trump signed an executive order in May that would prevent U.S. businesses to work with any foreign company that poses a national security threat. Added to that list of companies is Shenzhen, China-based Huawei.

Intel and Micron have declined to comment.

However, Micron does admit that some of the components supplied to Huawei weren’t be restricted by the government the regulation.

“We have started shipping some orders of those products to Huawei in the last two weeks,” said Micron CEO Sanjay Mehrotra during a conference call about quarterly results on June 25th. Mehrotra said that a subset of Micron products is not restricted for Huawei to purchase.

Kevin Wolf, a former U.S. Commerce Department official and partner at the law firm Akin Gump, has informed several U.S. tech companies about the proper way to supply Huawei under the existing ban.

Wolf said that chips manufactured outside of the United States do not fall under the restriction as long as the American company does not provide instructions or after-sale service.

“This is not a loophole or an interpretation because there is no ambiguity. It’s just esoteric,” says Wolf.

In a Wall Street Journal article, Qualcomm has resumed shipments of radio-frequency components to Huawei after reviewing the rules from the Commerce Department.

San Jose-based technology manufacturer Flex Ltd. said that it also resumed 90 percent of its Huawei-related production after evaluating the business ties with the Chinese telecom giant. Phoenix-based chipmaker ON Semiconductor said that they are working with lawmakers and the Commerce Department to improve the situation with regards to Huawei.

Source: The New York Times, The Wall Street Journal