Nvidia headquarters seen on Feb. 22, 2023 in Santa Clara, California.
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U.S. chipmaker Nvidia’s plans to sell technology to China’s Huawei could be thwarted if the U.S. government proceeds with a proposal to further restrict shipments to the blacklisted company, a draft report by a government contractor shows.
The Biden administration has been considering limiting the items it authorizes U.S. corporations to ship to telecoms equipment giant Huawei Technologies, which was added to a U.S. trade blacklist in 2019 but which continues to receive billions in U.S. goods under a special plan implemented by the Trump administration.
“The proposed 2023 amendment of (the Commerce Department’s) licensing will likely have a high economic impact on Nvidia,” in line with excerpts of the draft report seen by Reuters, referring to the corporate’s “pending license value.”
Nvidia’s plans to sell to Huawei haven’t been previously reported.
A Nvidia spokesperson declined to comment on the document, saying: “The China market presents a major opportunity for the U.S. semiconductor industry. While we’re unable to comment on any pending license requests, we work with customers and partners worldwide to comply with all applicable export controls and meet market demand.”
A senior State Department Official said the document was a preliminary draft prepared by a contractor, and the department “wouldn’t have approved of the report in its current form.” It also said the federal government “has written and contracted multiple reports on this subject, based on different contingencies, which arrive at very different conclusions.”
The White House and Commerce Department declined to comment. Huawei didn’t reply to a request for comment.
The document shows the Biden administration is in search of to evaluate the impact on U.S. corporations of proposed Huawei policy changes before imposing latest rules that would crimp projected revenue streams at a time when the tech industry is already reeling. It also provides unusual insight into the politically sensitive query of which U.S. corporations are in search of business ties to Huawei, certainly one of Washington’s most penalized Chinese corporations.
Reuters couldn’t learn the small print of the particular policy change whose impact was being assessed within the report.
The report suggested Qualcomm would likely suffer a “moderate economic impact” from the change in policy, in contrast to Huawei. Indeed, the lack of access to Qualcomm’s modem chips would have an even bigger impact on Huawei, the report forecast, since Huawei “relies heavily on Qualcomm’s modem chips to support its smart phone offering.”
Qualcomm didn’t reply to a request for comment.
Reuters reported in 2021 that U.S. officials had approved license applications price a whole lot of tens of millions of dollars for Huawei to purchase chips for its growing auto component business, including vehicle components resembling video screens and sensors, as trade restrictions crippled other business lines.
Huawei was placed on the “entity list” in 2019 amid fears it could spy on Americans and allegations it was stealing mental property and violating sanctions. The usrequires that suppliers seek a special license that is normally denied when selling U.S. goods to corporations on the list. However the Trump administration instituted a more lenient policy for Huawei, blocking its access to 5G chips but allowing other items like 4G chips to be shipped to the firm.
The Commerce Department’s top export controls official, Alan Estevez, said this week the Trump-era policy allowing U.S. technology below the “5G level” to be shipped to Huawei was “under assessment.”
But sources say there are differences throughout the administration odds over how far to go: some officials advocate blocking all licenses to Huawei suppliers and revoking existing authorizations, while others need to extend restrictions only to 4G chips and other targeted technologies going forward.