Companies supplying semiconductors and other components to the Chinese telecommunications equipment and smartphone manufacturer Huawei are expected to be unable to conduct transactions with the Ministry of National Defense in the future.
On the 10th (local time), according to Bloomberg News, the newly released National Defense Authorization Act (NDAA) on the 7th includes a provision that prohibits U.S. Department of Defense contractors from selling semiconductors, semiconductor manufacturing equipment, and semiconductor design facilities to Huawei or its affiliates.
If the National Defense Authorization Act containing this provision is passed, companies supplying advanced semiconductor technology to Huawei will be unable to conduct transactions with the Ministry of National Defense, allowing the U.S. government to exert greater pressure on various suppliers.
According to the U.S. Government Accountability Office, the Department of Defense entered into contracts worth about $460 billion (approximately 658 trillion won) with corporations in the 2023 fiscal year. The U.S. continues to strengthen measures to block China's access to advanced technologies, but assessments indicate that the Department of Commerce still allows Huawei limited access to non-advanced products.
Last week, U.S. House of Representatives Select Committee on U.S.-China Strategic Competition Chairperson John Molinar (Republican) pointed out that the Biden administration left loopholes that enabled Huawei to continue to secure U.S. technology.
Additional restrictions on Huawei will take effect 270 days after the president signs the bill following its passage. The bill allows the Minister of National Defense to make exceptions if they determine that a contract is necessary for national security and there are no other suppliers.