Nvidia plans to sell Huawei tech to U.S. govt.

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Nvidia plans to sell Huawei tech to U.S. govt.

WASHINGTON U.S. chipmaker Nvidia Corp plans to sell technology to China's Huawei would be thwarted if the US government proceeds with a proposal to restrict shipments to the blacklisted company, according to a draft report by a government contractor.

The Biden administration has been considering limiting the items it authorizes US companies to ship to telecoms equipment giant Huawei Technologies Co, which was added to a U.S. trade blacklist in 2019 but continues to receive billions of dollars in U.S. goods under a special plan implemented by the Trump administration.

The proposed 2023 amendment of the Commerce Department's licensing will likely have a high economic impact on Nvidia, according to excerpts of the draft report seen by Reuters, referring to the company's pending license value. Nvidia's plans to sell to Huawei have not been previously reported.

A Nvidia spokesman declined to comment on the document, saying that the China market presents a significant opportunity for the U.S. semiconductor industry. We work with customers and partners worldwide to comply with all applicable export controls and meet market demand, although we are not able to comment on any pending license requests. A senior State Department official said the document was a preliminary draft prepared by a contractor, and the department wouldn't approve of the report in its current form. The government has written and contracted multiple reports on this subject, based on different contingencies, which arrive at very different conclusions. The White House and Commerce Department didn't want to say anything. Huawei did not respond to a request for comment.

The Biden administration is trying to assess the impact of proposed Huawei policy changes on U.S. companies before imposing new rules that could crimp projected revenue streams at a time when the tech industry is already reeling. It also provides unusual insight into the politically sensitive issue of which U.S. companies are seeking business ties to Huawei, one of Washington's most penalized Chinese companies.

The impact of the policy change that was assessed in the report was not known by Reuters.

According to the report, Qualcomm would likely suffer a moderate economic impact from the change in policy, unlike Huawei. The report said that the loss of access to Qualcomm's modem chips would have a bigger impact on Huawei, since Huawei relies heavily on Qualcomm's modem chips to support its smart phone offering. Qualcomm didn't respond to a request for comment.

In 2021, Reuters reported that U.S. officials had approved license applications worth hundreds of millions of dollars for Huawei to buy chips for its growing auto component business, including vehicle components, such as video screens and sensors, as trade restrictions crippled other business lines.

In the year 2019, Huawei was placed on the entity list due to fears it would spy on Americans and violate sanctions. The U.S. requires suppliers to obtain a special license that is usually denied when selling U.S. goods to companies on the list. The Trump administration imposed a more lenient policy for Huawei, blocking access to 5 G chips, but allowing other items like 4 G chips to be shipped to the firm.

The Commerce Department's top export controls official, Alan Estevez, said this week that the Trump-era policy allowing U.S. technology below 5 G levels to be shipped to Huawei was under review. Some officials advocate blocking all licenses to Huawei suppliers and revoking existing authorizations, while others want to extend restrictions only to 4 G chips and other targeted technologies going forward, while others say there are differences within the administration.