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America’s latest salvo against Huawei is aimed at chipmaking in China

21 May 2020

AMERICA HAS it in for Huawei—and not just because some of its politicians fear the Chinese giant’s networking gear lets spooks in Beijing eavesdrop on customers’ communications. The firm, a world leader in futuristic 5G telecoms, also symbolises China’s technological and economic ascent. President Donald Trump does not like it one bit. William Barr, his attorney-general, has warned that America risks “surrendering dominance” to China if it cannot “blunt Huawei’s drive” to 5G supremacy.

An earlier attempt at blunting, which made it illegal to sell American-made components to Huawei, including advanced computer chips on which the Chinese firm relies, was not the knock-out blow the White House hoped it to be. Chipmakers were able keep shipping Huawei semiconductors from factories outside America. So on May 15th the Trump administration extended its restrictions from chips to the tools used to make them—many of which come from America. So long as big microprocessor producers, like Taiwan Semiconductor Manufacturing Company (TSMC), use American-made equipment, they will no longer be able to forge Huawei-designed chips anywhere in the world.

In a press conference on May 18th a reticent Huawei said that the new rule put its survival at risk. Three days later President Xi Jinping vowed to invest $1.4trn by 2025 to increase...


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This content was originally published by The Economist: Business. Original publishers retain all rights. It appears here for a limited time before automated archiving. By The Economist: Business

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