The US government’s continued assault on Huawei, this time by restricting the Chinese company and its 38 affiliates from getting chips using US technologies, beat down the share price of many chip companies on Tuesday morning.
Taiwan-based semiconductor company MediaTek saw share prices slump by 9.93 percent as of press time to TWD617 ($20.98). MediaTek reportedly supplied chips for several Huawei phones. Shares of semiconductor company Realtek, also based in Taiwan, slumped by 5.24 percent to TWD 388.50.
The share price of mainland chip giant SMIC fell by 1.91 percent on Tuesday morning.
The chip makers’ share prices slumped after the US government further restricted access by Huawei and its non-US affiliates on the Entity List to items produced domestically and abroad from US technology and software.
On Monday, a Commerce Department statement imposed license requirements on “any transaction” involving items subject to US export control jurisdiction where a party on the Entity List is involved, such as when Huawei acts as a purchaser, intermediate, or end user.
This means that any company in the world selling US technology-backed products to Huawei must get a license from the US government.
The US Commerce Department said in its statement that the move is designed to prevent Huawei’s attempts to circumvent US export controls to obtain electronic components developed using US technologies.
In addition, the department also added 38 Huawei affiliates around the world to the “entity list.”
MediaTek said it is paying close attention to the changes in US export control rules and consulting external legal counsel to obtain the latest regulations in real time for legal analysis to ensure compliance with the new rules, according to a report from yicai.com on Tuesday.
Based on its assessment of the information at hand, Huawei says the rule has no significant impact on the company’s short-term operations.
Telecommunications expert Xiang Ligang said that the US’ restrictions would bring huge losses to many global chip makers, forcing them to lose a huge client in Huawei.
“Huawei has plenty of product stockpiled and therefore has some buffer time to solve the problem,” Xiang told the Global Times.”But for some small chipmakers, they might find themselves facing a fight for survival if they lose Huawei as a client.”
Xiang added that the US policies toward Huawei might change after the presidential election.
A visitor experiences Huawei’s 5G Mate30 Pro at a press conference in Shenzhen, south China’s Guangdong Province. Photo: Xinhua
