Worsening relations between Washington and Beijing could trigger punishing new US restrictions on Huawei’s supply of cutting-edge microchips. But some experts believe this would only backfire by pushing China, and other countries, to develop more alternatives to advanced US technologies.
The Trump administration is reportedly mulling controls that would require any company using chip-manufacturing equipment made by a US company to obtain a license before supplying Huawei, the Chinese telecom giant. This would effectively cut the company off from chips manufactured by the Taiwanese chipmaker TSMC. The Taiwanese company relies on equipment from US suppliers, including Applied Materials and Teradyne, according to its website.
Such an escalation would “increase the urgency of Huawei’s existing drive toward a more China-based semiconductor supply chain,” says Neil Thomas, a senior research associate at Macro Polo, a China-focused think tank within the Paulson Institute in Chicago. Thomas recently coauthored a report on China’s nascent chip industry.
Besides providing fresh impetus for Chinese technology development, Thomas believes the restricti
