LDN - Business

U.S. chipmakers quietly lobby to ease Huawei ban

[June 17, 2019] By Stephen Nellis and Alexandra Alper

SAN FRANCISCO/WASHINGTON (Reuters) - Huawei's American chip suppliers, including Qualcomm and Intel, are quietly pressing the U.S. government to ease its ban on sales to the Chinese tech giant, even as Huawei itself avoids typical government lobbying, people familiar with the situation said.

Executives from top U.S. chipmakers Intel and Xilinx Inc attended a meeting in late May with the Commerce Department to discuss a response to Huawei's placement on the black list, one person said.

The ban bars U.S. suppliers from selling to Huawei, the world's largest telecommunications equipment company, without special approval, because of what the government said were national security issues.

Qualcomm has also pressed the Commerce Department over the issue, four people said.

Chip makers argue that Huawei units selling products such as smartphones and computer servers use commonly available parts and are unlikely to present the same security concerns as the Chinese technology firm's 5G networking gear, according to three people.

"This isn't about helping Huawei. It's about preventing harm to American companies," one of the people said.

Out of $70 billion that Huawei spent buying components in 2018, some $11 billion went to U.S. firms including Qualcomm, Intel and Micron Technology Inc.

Qualcomm, for example, wants to be able to continue shipping chips to Huawei for common devices like phones and smart watches, a person familiar with the company's situation said.

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A Huawei company logo is seen at a shopping mall in Shanghai, China June 3, 2019. REUTERS/Aly Song/File Photo

The Semiconductor Industry Association (SIA), a trade group, acknowledged it arranged consultations with the U.S. government on behalf of the companies to help them comply and brief officials on the impact of the ban on the companies.

"For technologies that do not relate to national security, it seems they shouldn't fall within the scope of the order. And we have conveyed this perspective to government," said Jimmy Goodrich, vice president of global policy at SIA.

The ban came soon after the breakdown of talks to end the months-long trade spat between China and the United States, spurred by U.S. allegations of Chinese corporate espionage, intellectual property theft and forced technology transfer.

Google, which sells hardware, software and technical services to Huawei, has also advocated so it can keep selling to the company, Huawei Chairman Liang Hua told reporters in China earlier this month.

The online search company, a unit of Alphabet Inc, said in a statement that it works with Commerce to ensure it is in compliance with the new rules.

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