This archive report was first published on 18 June 2020.
On June 15th, 2020, the US Commerce Department made a significant move by amending the trade blacklist to allow American companies to participate in international 5G standards development activities. This decision comes after the department initially blacklisted Huawei and its affiliates in May 2020, restricting them from buying computer chips made or designed with US equipment.
According to the new rule, US firms can still work with Huawei in standard-setting bodies, but any company that wishes to manufacture computer chips to Huawei's designs with US tools now needs to apply for a license. This clarification aims to ensure that American companies can continue to contribute to the development of critical standards that govern technology.
US Department of Commerce Secretary Wilbur Ross stated, 'The United States will not cede leadership in global innovation. This action recognizes the importance of harnessing American ingenuity to advance and protect our economic and national security.'
Jefferies equity analyst Edison Lee, however, views this move as a reflection of the US's realization that it is too late and too expensive for any country to develop its own 5G standard. Lee added, 'The US has more to lose if their companies are cut off from further participation in that process. Huawei has leading patent shares in 5G, which could rise further if US companies stop contributing.'
