The Trump administration is weighing new rules that would further restrict Huawei access to chips.
Reuters reports the US government is considering a plan to widen existing regulations that would require companies such as Taiwan chipmaker TSMC to obtain a US license for exports to Huawei.
TSMC is the world's largest contract chip supplier and a prime contractor for Huawei's HiSilicon chips.
Officials are set to meet next week to discuss whether to extend the "direct product rule" to cover chip exports to Huawei, the Reuters report said.
The direct product rule is a part of the US export control scheme and can be applied to goods manufactured abroad using US technologies.
Effectively, the new measure aims to leverage the US dominance in chipmaking equipment to tighten the chains around Huawei.
According to Reuters, new restrictions on trading with China's Huawei are among several options to be considered at high-level meetings. However, approval of the proposal to limit chips exports is far from certain.
The move appears to be part of a renewed US government effort to check Huawei.
The Chinese vendor has been on a Commerce Department's Entity List since May last year, but to date it has had a limited impact.
Huawei reported an 18% lift in full-year revenue last year. (See Huawei Braces for 'Difficult' 2020 After Q4 Slowdown.)
CEO Ren Zhengfei has said the ban has had not prevented it from obtaining components for its network equipment production. Besides Huawei's own stockpiling of components, many US suppliers have skirted the ban by exporting from offshore subsidiaries.
In the latest blow, the UK government decided to allow Huawei to supply 5G radio access equipment despite intense lobbying by US officials. The Trump administration is now trying to persuade Germany and other EU governments to exclude Huawei.
But in an escalation of the campaign last week, the US Department of Justice filed racketeering charges against the firm, alleging Huawei stole intellectual property from US companies and breached sanctions against Iran and North Korea. (See Huawei accused of 'racketeering' in latest US attack.)
— Robert Clark, contributing editor, special to Light Reading