THE Trump administration is considering changing U.S. regulations to allow it to block shipments of chips to Huawei Technologies Co. from companies such as Taiwan’s TSMC, the world’s largest contract chipmaker, two sources familiar with the matter said.

New restrictions on commerce with Huawei are among several options to be considered at high-level U.S. meetings this week and next.

The chip proposal has been drafted but its approval is far from certain, one of the sources said.

The measure would be a blow to Huawei, the world’s No. 2 smartphone maker, as well as to TSMC, a major producer of chips for Huawei’s HiSilicon unit and mobile phone rivals Apple Inc. and Qualcomm Inc.

“What they’re trying to do is make sure that no chips go to Huawei that they can possibly control, the second source said.

Huawei is at the heart of a battle for global technological dominance between the United States and China. The United States is trying to convince allies to exclude its gear from next generation 5G networks on grounds its equipment could be used by China for spying. Huawei has repeatedly denied the claim.

To target global chip sales to Huawei, U.S. authorities would alter the Foreign Direct Product Rule, which subjects some foreign-made goods based on U.S. technology or software to U.S. regulations.

Reuters reported possible changes to that rule in November last year.

Under the draft proposal, the U.S. Government would force foreign companies that use U.S. chipmaking equipment to seek a U.S. license before supplying Huawei, a major expansion of export control authority that could anger U.S. allies worldwide.

The U.S. Commerce Department declined to comment on the proposal.

But a U.S. Commerce Department spokesman said recent U.S. charges against Shenzhen-based Huawei “reaffirm the need for caution in considering license applications. The United States continues to have major concerns about Huawei.”

Huawei did not respond to requests for comment. A spokeswoman for TSMC said the company does not answer “hypothetical” questions and does not comment on individual customers. (SD-Agencies)