US chipmakers quietly lobby to ease Huawei ban: sources

Huawei's American chip suppliers, including Qualcomm and Intel, are quietly pressing the US government to ease its ban on sales to the Chinese tech giant, people familiar with the situation said.

Executives from top US chipmakers Intel and Xilinx Inc attended a meeting in late May with the Commerce Department to discuss a response to Huawei's placement on the black list, one person said.

The ban bars US suppliers from selling to Huawei, the world's largest telecommunications equipment company, without special approval, because of what the government said were national security issues.

Qualcomm has also pressed the Commerce Department over the issue, four people said.

Chip makers argue that Huawei units selling products such as smartphones and computer servers use commonly available parts and are unlikely to present the same security concerns as the Chinese technology firm's 5G networking gear, according to three people.

"This isn't about helping Huawei. It's about preventing harm to American companies," one of the people said.

Out of US$70 billion that Huawei spent buying components in 2018, some US$11 billion went to US firms including Qualcomm, Intel and Micron Technology Inc.

Qualcomm, for example, wants to be able to continue shipping chips to Huawei for common devices like phones and smart watches, a person familiar with the company's situation said.

The Semiconductor Industry Association, a trade group, acknowledged it arranged consultations with the US government on behalf of the companies to help them comply and brief officials on the impact of the ban on the companies.

"For technologies that do not relate to national security, it seems they shouldn't fall within the scope of the order. And we have conveyed this perspective to government," said Jimmy Goodrich, vice president of global policy at SIA.

The ban came soon after the breakdown of talks to end the months-long trade spat between China and the United States, spurred by US allegations of Chinese corporate espionage, intellectual property theft and forced technology transfer.

Google, which sells hardware, software and technical services to Huawei, has also advocated so it can keep selling to the company, Huawei Chairman Liang Hua told reporters in China earlier this month.

In an interview in Mexico, Andrew Williamson, vice president of Huawei's public affairs, said the company had not asked anyone specifically to lobby on its behalf.

"They're doing it by their own desire because, for many of them, Huawei is one of their major customers," he said, adding that chipmakers knew that cutting Huawei off could have "catastrophic" consequences for them.

Huawei itself, which is also a top smartphone maker, has done very little traditional lobbying in Washington on the matter, but has considered sending a letter to the Commerce Department, two people familiar with Huawei's thinking said.

"We simply have no channel of communication," Liang told reporters earlier this month.

A month after being blacklisted, Huawei has not spoken to the United States government about the matter, two people said.

The ban has had real repercussions.

Broadcom, which has not been lobbying the Commerce Department, sent a shockwave through the global chipmaking industry when it forecast that the US-China trade tensions and the Huawei ban would knock US$2 billion off its sales this year.