(Yicai Global) Aug. 18 -- The Trump administration’s expanded restrictions on Huawei Technologies’ access to foreign-made chips will wreak havoc on the US semiconductor industry, according to the lobby group that represents 95 percent of its members.

“These broad restrictions on commercial chip sales will bring significant disruption to the US semiconductor industry,” John Neuffer, the US Semiconductor Industry Association’s chairman and chief executive, said in a statement on the group’s website yesterday.

Issued by the US Commerce Department yesterday, the new sanctions prohibit non-American companies from supplying the Chinese telecom equipment giant with chips made using US software or technology without a special permit.

“We are surprised and concerned by the administration’s sudden shift from its prior support of a more narrow approach intended to achieve stated national security goals while limiting harm to US companies,” Neuffer said.

“We reiterate our view that sales of non-sensitive, commercial products to China drive semiconductor research and innovation here in the US, which is critical to America’s economic strength and national security.”

The latest development hit the shares of MediaTek [TPE: 2454], which fell 9.9 percent today. When Huawei was forced to switch from independent production to outsourced chips due to the ban, Hsinchu-based MediaTek was seen as the main beneficiary. A question mark now hangs over that.

MediaTek is closely monitoring the changes in US export control rules and taking outside legal counsel, it told Yicai Global, adding that based on existing information, the new rules will have no significant impact on its short-term operations.

The Trump administration also added 38 Huawei affiliates in 21 countries to its economic blacklist, increasing the total to 152 since Shenzhen-based Huawei was first included in May 2019.

An analyst told Yicai Global that the Commerce Department has not clearly defined what “using US software or technology” means, and that further interpretation is needed as to whether chipmakers, including MediaTek, Samsung and others, are included in the restrictions.

“If the US defines the use of technology as 1 percent, then not only chip firms in Taiwan, but also supply chain companies in Japan and South Korea will be affected,” he said.

Editors: Dou Shicong, Peter Thomas