© Reuters. FILE PHOTO: The NVIDIA logo seen at its corporate headquarters in Santa Clara, California, in May 2022. Courtesy NVIDIA/Handout via REUTERS
By Alexandra Alper
WASHINGTON (Reuters) – US chipmaker Nvidia (NASDAQ:) Corp’s plans to sell technology to China’s Huawei could be thwarted if the US government proceeds with a proposal to further restrict shipments to the listed company blacklisted, a draft report from a government contractor shows.
The Biden administration has been considering limiting the items it authorizes US companies to ship to telecoms equipment giant Huawei Technologies Co, which was added to a US trade blacklist in 2019 but continues to receive billions in American products under a special plan implemented by Trump. administration.
“The proposed 2023 amendment to the (Commerce Department) license will likely have a high economic impact on Nvidia,” according to excerpts from the draft report seen by Reuters, referring to the company’s “pending license value.”
Nvidia’s plans to sell to Huawei have not been previously reported.
An Nvidia spokesperson declined to comment on the document, saying: “The China market presents a significant opportunity for the US semiconductor industry. Although we cannot comment on any pending license applications, we are working with customers and partners on worldwide to comply with all applicable requirements”. export controls and meet market demand.
A senior State Department official said the document was a preliminary draft prepared by a contractor and that the department “would not have approved the report in its current form.” He also said that the government “has written and commissioned multiple reports on this subject, based on different contingencies, reaching very different conclusions.”
The White House and the Commerce Department declined to comment. Huawei did not respond to a request for comment.
The document shows that the Biden administration is trying to assess the impact on US companies of Huawei’s proposed policy changes before imposing new rules that could affect projected revenue streams at a time when the tech industry is already reeling. . It also provides unusual insight into the politically sensitive question of which American companies seek business ties with Huawei, one of the Chinese companies most penalized by Washington.
Reuters was not able to learn the details of the specific policy change whose impact was being assessed in the report.
The report suggested that Qualcomm (NASDAQ:) would likely suffer a “moderate economic impact” from the policy change, in contrast to Huawei. In fact, the loss of access to Qualcomm’s modem chips would have a bigger impact on Huawei, the report predicts, as Huawei “relies heavily on Qualcomm’s modem chips to support its smartphone offerings.”
Qualcomm did not respond to a request for comment.
Reuters reported in 2021 that U.S. officials had approved hundreds of millions of dollars worth of license applications for Huawei to buy chips for its growing business of auto components, including vehicle components such as video displays and sensors, as restrictions commercial paralyzed other lines of business.
Huawei was placed on the “entity list” in 2019 amid fears it could spy on Americans and allegations it was stealing intellectual property and violating sanctions. The US requires suppliers to seek a special license that is typically denied when they sell US products to listed companies. But the Trump administration instituted a more lenient policy for Huawei, blocking its access to 5G chips but allowing other items such as 4G chips to be shipped to the company.
The Commerce Department’s top export controls official, Alan Estevez, said this week that the Trump-era policy allowing US technology to be shipped below the “5G level” to Huawei was “under review.”
But sources say there are differences in the administration’s odds on how far to go: some officials advocate blocking all licenses to Huawei suppliers and revoking existing authorizations, while others want to extend the restrictions to just chips. 4G and other specific technologies in the future.
