U.S. tech companies find workaround of Huawei export ban: report

The Wall Street Journal named Qualcomm, Intel and Micron Technology as three companies that have resumed supplying Huawei with certain components and products while remaining compliant with U.S. export restrictions. (GettyImages)

Although the Trump administration blacklisted Huawei from U.S.-made technology, some large American tech companies have reportedly found workarounds to comply with government export restrictions and resume shipments to the Chinese tech giant.

The Wall Street Journal named Qualcomm, Intel and Micron Technology as three companies that have resumed supplying Huawei with certain components and products while remaining compliant with U.S. export restrictions.  

Speaking on a Tuesday earnings call with investors, Micron CEO Sanjay Mehrotra said the company immediately suspended shipments to Huawei after it and 68 affiliates were placed on the U.S. Commerce Department’s entity list in May. That action effectively put a ban on exporting certain U.S. technology and components to Huawei. Mehrotra said that in the last two weeks Micron resumed some shipments after determining certain products were not subject to the government’s export restrictions.

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“However, there is considerable ongoing uncertainty surrounding the Huawei situation, and we are unable to predict the volumes or time periods over which we’ll be able to ship products to Huawei,” said Mehrotra, according to a transcript from SeekingAlpha.  

RELATED: U.S. mulls ban on 5G equipment made in China: report

The WSJ, citing sources familiar with the matter, said Qualcomm has resumed shipping certain radio-frequency components to Huawei after determining compliance under Commerce Department regulations, but has not resumed shipments of broadband chips. Intel has reportedly also resumed sending some products to Huawei, according to the New York Times.  

As noted by the news outlet, Huawei has said it purchases about $11 billion in technology from U.S. companies every year.

There are many complex aspects companies must consider when assessing what products they can or cannot ship to Huawei, but the WSJ indicated the export restrictions wouldn’t apply to shipments of parts built in foreign countries, as long as the products contain less than 25% of U.S.-made material.

RELATED: Ericsson pledges $100M to build smart factory in U.S.

If companies determine they can label products as foreign-made, those also may be exempt from the Huawei ban, but the exact criteria needed to meet that classification is not laid out in regulations, according to Kevin Wolf, a partner at law firm Akin Gump and former Commerce Department official, who spoke to the WSJ.

President Trump and President Xi Jinping of China are scheduled to meet at the G-20 summit in Japan this week to discuss the countries’ ongoing trade dispute. 

Huawei, which recently surpassed Apple as the world’s No. 2 smartphone-maker, has been the subject of much attention amid tensions between China and the U.S. The U.S. has taken steps to keep Huawei telecom equipment out of the country’s next-gen 5G networks citing national security threats and has pressed allies around the world to do the same.  

Earlier this week, reports indicated the government is questioning vendors like Nokia and Ericsson on their ability to shift production of 5G network equipment outside of China.

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