Despite the Trump administration’s antagonism and blacklisting of Chinese telecom equipment giant Huawei over national security concerns, many U.S chip companies are still supplying products to the Chinese company.

Blacklisting of Huawei mandates American suppliers to take prior permission from the U.S government to do business with that Chinese company.  

However, a report by The New York Times revealed that many U.S chip makers, including Intel and Micron, are still selling products worth millions of dollars to Huawei ignoring the Trump administration’s ban. It also said American companies, including chipmakers Intel and Micron, are using the loopholes in the trade law to sell technology to Huawei.

The Commerce Department clamped the Huawei ban in May.

For Huawei, the willingness of U.S suppliers ensures a seamless supply of components despite the ban and help to sell its key products such as smartphones like Huawei P20 Pro and servers like FusionServer 1288H V5 without any interruption.

Loopholes in trade law

According to the New York Times report, sale of components to Huawei resumed three weeks ago. The alibi used by some of the U.S suppliers is that goods produced by American companies overseas are not deemed American-made.

As of now, American companies can supply technology to support Huawei’s current products until mid-August.  

But the ban makes it explicit that stopping of supply of many components for future Huawei products will be imperative.

It is unclear what percentage of the current sales to Huawei covers those future products.

Both Intel and Micron refused to comment.

However, John Neuffer, president of the Semiconductor Industry Association made an indirect defense of the companies and said, “some items may be supplied to Huawei consistent with the entity list and applicable regulations per discussions with the U.S. government.”

Huawei reportedly spends an average $11 billion a year in technology purchase from U.S companies every year.

The report also said the Trump administration is aware of the sales to Huawei but officials are divided on how to react.

A section of officials finds the sales as infringing the law and defeating the government’s bid to pressure Huawei. However, many officials view secret sales as a way of easing pressure on American corporations who face a loss of business from the curbs.  GettyImages-Huawei The Huawei Technologies Co. logo is displayed at the Huawei headquarters on March 29, 2019, in Shenzhen, China. Photo: Photo by Billy H.C. Kwok/Getty Images

Huawei forays into server chips

Meanwhile, Huawei unveiled a new core processor chipset for application in data center servers.

From a business point of view, it aims to take on the market for Intel's products.

Dubbed Kunpeng 920, the chipset was jointly developed with U.K. chip designer Arm Holdings. Promising improved performance and reduced power consumption these advanced chips are being produced using the 7-nanometer process.

Intel commands 96 percent of the global market share in server chips with its Intel X-86 architecture.