THE Trump administration Monday announced it will further tighten restrictions on Huawei Technologies Co., aimed at cracking down on its access to commercially available chips.

The U.S. Commerce Department actions expand restrictions announced in May aimed at preventing the Shenzhen-based telecommunications giant from obtaining semiconductors without a special license, including chips made by foreign firms that have been developed or produced with U.S. software or technology.

The Trump administration also added 38 Huawei affiliates around the world to the U.S. Government’s economic blacklist, raising the total to 152 affiliates since Huawei was first added in May 2019.

The restrictions underscore the rift in Sino-U.S. relations, as Washington presses governments around the world to squeeze Huawei out.

“It will have a huge impact,” said Gu Wenjun, chief analyst at Shanghai-based consultancy ICWise, referring to tighter U.S. curbs. “It will throw off Huawei’s plans to obtain chips by purchasing them externally, rather than relying on HiSilicon.”

Existing U.S. restrictions have had a heavy impact on Huawei and its suppliers. The restrictions announced in May do not fully take effect until Sept. 14.

On Aug. 8, financial magazine Caixin reported Huawei will stop making its flagship Kirin chipsets next month due to U.S. pressure on suppliers.

Huawei’s HiSilicon division has relied on software from U.S. companies to design its chips. It outsourced the production to Taiwan Semiconductor Manufacturing Co., which uses equipment from U.S. companies.

U.S. firms will also suffer from the new U.S. sanctions.

“These broad restrictions on commercial chip sales will bring significant disruption to the U.S. semiconductor industry,” said John Neuffer, president of the Semiconductor Industry Association, a trade group representing U.S. chipmakers.

Chip sales to China “drive semiconductor research and innovation here in the [United States], which is critical to America’s economic strength and national security,” Neuffer said.

Qualcomm had reportedly been lobbying the U.S. Government to grant it a license to sell chips to Huawei, arguing that Huawei generates billions of dollars in sales for Qualcomm and help the U.S. firm fund development of new technologies, according to The Wall Street Journal. (SD-Agencies)