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US companies have started selling to Huawei again after discovering legal loopholes

Huawei headquarters pic

American tech companies are doing business with Huawei after all after discovering what they call legal loopholes in the Trump blacklist. Bloomberg reported that some companies were now delivering certain products to the Chinese company.

The American companies that have reopened business with the world’s second largest smartphone maker are Micron Technology Inc which is the largest US maker of computer memory chips. The memory chips processor said this week it had started shipping some components to Huawei after its lawyers studied export restrictions.

It is reported that Intel Corp which was among the first to announce suspension of business relations with Huawei following Trumps ban has also started delivering some components to the Chinese company. Intel is the world’s largest manufacturer of microprocessors.

The loophole being exploited is where US companies with overseas subsidiaries grade their technology as foreign. The ban by the US Department of Commerce against Huawei dictated that American technology in a chip had to be more than 25 percent for such a chip to qualify for the ban. If less than 25 percent of the technology in a chip originates in the US then it may not be covered by the ban.

“It took them weeks to figure this out. What they did was look at the laws and the rules and applied them to their business,” Cross Research analyst Steven Fox told Bloomberg.

Micron has subsidiaries and factories across several nations including Singapore, Japan and Taiwan while Intel has operations in China, Ireland and a major design center and production facility in Israel.

The Trump administration is definitely not amused by the developments even though it is yet to officially give a comment. The Semiconductor Industry Association trade group already made a statement in support of its members who opt to continue doing business with important customers. However one of the most important suppliers is Google with its Android OS, and so far there is no way around the ban for the search giant.

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