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US halts computer chip sales to China-based Huawei Technologies

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The US Commerce Department on Tuesday restricted the sale of American technology to China’s leading high-tech firm, Huawai Technologies and revoking certain allowances of US chip sales amid renewed scrutiny of company in Washington, The Washinton Post reported.

“We are not commenting on any specific licences, but we can confirm that we have revoked certain licences for exports to Huawei,” the department said in a statement.

Furthermore, the new orders will prevent US-based manufacturers like Intel and Qualcomm from selling chips for computing devices to Huawei, The Washington Post reported citing three people familiar with the matter.

Huawei has been on the radar of other US federal agencies like the Federal Communications Commission, additionally, the Biden administration has been pushing to establish more companies in the US that can compete with Huawei Technologies.

The China-based manufacturer has been at the center of US-China rivalry because it is China’s most proficient technology company. Moreover, the firm also has significant sales of internet and phones in rural parts of the US. These networks interest intelligence agencies due to the data they carry.

The Washington Post reported that US experts on the matter fear that these devices may be more susceptible to infiltration by Chinese intelligence agencies. And the report further claims that, despite years of US efforts to stymie its advance, Huawei was still the world’s No. 1 company in 2023 in terms of the number of patent applications filed. It is also still the world’s top seller of the pipes that make up internet and phone networks, and remains a major player in consumer gadgets like smartphones.

Separately on Tuesday, the National Telecommunications and Information Administration (NTIA) announced USD 420 million in grants for companies from the United States and ally nations to build phone network gear that can compete against Huawei’s. The NTIA included a requirement for grant recipients to pair up with a network operator to help ensure their products can secure a major buyer when they go to market, according to the report.

The initial bans and sanctions on Huawei were introduced under the Trump administration, as US vendors were allowed to make sales, which at that time had forced the company to switch to China-based manufacturers for their demand. However, US companies were allowed to sell Huawei the components that were deemed less sensitive following the laws made during the Trump administration.