The U.S. Department of Commerce on Friday placed additional sanctions on Chinese tech giant Huawei to limit the company’s ability to acquire semiconductor chips that are made using American technology.
The Commerce Department said the sanctions will “narrowly and strategically” target a loophole used by some companies to evade previous sanctions by producing semiconductor chips overseas, with American technology, and selling them directly to Huawei. The U.S. considers Huawei a threat to national security since the Chinese Communist Party is able to access information gathered by the company from around the world, though Huawei maintains they have never given proprietary information to Beijing.
“Let’s cut to the chase: China’s main export is espionage, and the distinction between the Chinese Communist Party and Chinese ‘private-sector’ businesses like Huawei is imaginary,” Senator Ben Sasse (R., Neb.) said in a statement commending the sanctions. “Huawei’s supply chain depends on contracts with American companies and the Commerce Department ought to take a careful look at how we can effectively disrupt our adversary.”
Earlier on Friday, Taiwan Semiconductor Manufacturing Co., the world’s largest producer of semiconductor chips, announced it would build a factory in Arizona employing 1,600 workers. While the company may be hoping to gain some leverage with the Trump administration, whose new sanctions against Huawei would harm sales, Secretary of State Mike Pompeo touted the decision as a step towards reducing U.S. reliance on Chinese supply chains.
“The U.S. welcomes TSMC’s intention to invest $12B in the most advanced 5-nanometer semiconductor fabrication foundry in the world,” Pompeo wrote on Twitter. “This deal bolsters U.S. national security at a time when China is trying to dominate cutting-edge tech and control critical industries.