US firms may re-start selling components to Huawei shortly

The United States is likely to allow local companies to re-start sales to Huawei within 2-4 weeks, Reuters reported.
Huawei booth in MWC 2018
The new development is in the wake of anticipated lower sales to American technologies such as Intel, Qualcomm, Google, Micron Technology, among others. American companies are unable to supply components to Huawei at present without a formal approval from the Federal Government.

Commerce Department in May added Huawei, the world’s largest telecom equipment maker and the third largest smartphone supplier, to a list in May that blocks U.S. companies from supplying American-made goods and services without formal license.

As a result of the black-listing, Huawei recently said it would not meet its revenue targets of $135 billion in 2019. Huawei has revised its revenue target to nearly $100 billion in 2019 and 2020.

US President Donald Trump, after meeting with Chinese president Xi Jinping, announced American firms could sell components to Huawei. Commerce Secretary Wilbur Ross recently said the department could issue licenses if there is no threat to national security.

Huawei spent buying components worth $11 billion from U.S. technology firms including Qualcomm, Intel and Micron Technology. Huawei’s total components buying from global suppliers reached $70 billion in 2018.

“Since there’s no downside, companies are absolutely submitting applications, as required by the regulations,” said Washington lawyer Kevin Wolf, a former Commerce Department official.

A Huawei spokesman said “the Entity list restrictions should be removed altogether, rather than have temporary licenses applied for US vendors. Huawei has been found guilty of no relevant wrongdoing and represents no cybersecurity risk to any country so the restrictions are unmerited.”

U.S. companies can currently sell goods in order to maintain existing networks and provide software updates to existing Huawei handsets, but are prohibited from making new sales of American-made goods and services.

Some U.S. chipmakers sales to Huawei may not need licenses because their products could be beyond the scope of U.S. export controls since many are manufactured abroad with few U.S. components.