Reuters exclusively quoted sources as saying that the United States is preparing to crack down on Huawei’s global chip supply to curb chip manufacturers (such as TSMC) from supplying Huawei with the latest chips.

Under the proposed new rules, foreign companies using U.S. production equipment to launch chips must obtain U.S. licenses before selling certain chips to Huawei. Subsequently, China Daily published a comment saying, “Unless Huawei loses its competitiveness, the US government will not have the opportunity to stifle this Chinese company. If the new measures are implemented, the Chinese government will have no choice but to take the same measures against certain US companies.”

The new rules are designed to disrupt Huawei’s supply chain

According to a Reuters report in November last year, in accordance with current U.S. regulations, the main foreign supply chains are still not completely within the control of the U.S. authorities, coupled with the previous negative lobbying effect on Huawei, which has intensified the U.S. government’s frustration of the hawks prompted it to promote new regulations on Huawei’s exports.  The new regulations are formally implemented. The effect of the crackdown on Huawei and TSMC is not yet clear, but it will seriously harm the interests of American companies. It can be said that they have thrown stones and smashed their feet.

In a globalized economic environment, companies need to depend on each other to survive in market competition. American politicians want to prevent Huawei’s supply chain from exerting its value, so all enterprises that depend on this value chain for survival will be hit, and even suffer losses that are even greater than those suffered by Huawei. Trade lawyer Doug Jacobson believes: “The negative impact of this rule adjustment on American companies will be much greater than that of Huawei, because Huawei will develop its own supply chain and eventually, Huawei will find alternatives.”

TSMC is one of Huawei’s main chip manufacturers and the world’s largest chip foundry. Apple, Qualcomm and other chip products with different models are produced by TSMC. In response to this proposed rule adjustment, TSMC, which is one of Huawei’s supply chains, stated that “it cannot answer hypothetical questions and will not comment on any customers.”

At present, TSMC is still providing services to customers such as Huawei. In fact, once Huawei’s order is lost, Apple’s and Qualcomm’s orders will not bring enough development momentum for TSMC.

European success stories and progress failed to change American political prejudice

Because the U.S. government believes that Huawei’s technology has impacted and disrupted the long-established international intelligence chain, in May 2019, the U.S. government listed Huawei as an entity list without any evidence on the grounds of security, Restricting Huawei’s suppliers’ choice, and sending politicians to lobbi continuously in various European countries, restricting Huawei’s local communications business.

In fact, Huawei has been extensively involved in the construction of second, third and fourth generation networks in European countries a long time ago and has established a good reputation in the world. The US lobbying has not produced a follow-up effect among its European allies; Huawei has not been greatly affected because of its full preparation and strong technological accumulation. As of March 2020, Huawei has won 91 commercial 5G network construction contracts worldwide, of which more than half are from European countries.

Although Huawei’s cooperation in Europe has promoted the progress of local communication services. The win-win case failed to convince American politicians to abandon their political prejudice against Huawei, and instead continued to push against Huawei’s supply chain to maintain its control in Europe.