FCC closes component loophole for blacklisted Chinese tech
The FCC has voted to ban US sales of any devices containing logic-bearing hardware from Huawei and other blacklisted Chinese firms, introducing fresh compliance hurdles for global tech supply chains.
The Federal Communications Commission voted on Wednesday to prohibit the sale of devices in the US if they contain critical hardware from Chinese companies deemed national security risks. The ruling specifically targets logic-bearing components made by Huawei and others on the agency's restricted list. FCC Chair Brendan Carr stated the move will "fully close the component part loophole."
Since 2022, the FCC has blocked new authorizations for finished devices built by blacklisted companies like Huawei and ZTE. However, third-party manufacturers were still able to secure US market approval for their own equipment as long as it embedded Huawei-made parts inside. The new regulation eliminates this exception entirely.
The financial impact falls primarily on US equipment manufacturers that may have integrated cheaper Chinese parts into their products, as well as the blacklisted suppliers themselves. By targeting logic-bearing hardware—the semiconductors and processing chips that control device functions—the FCC is forcing a structural shift in global tech supply chains. Manufacturers now face heightened compliance costs to verify the origin of every embedded microchip.
"Compromised components, particularly semiconductors or communications devices, can be used to corrupt entire devices," Chris McGuire, a former White House National Security Council official under former President Joe Biden, told Reuters. This national security rationale underpins the regulatory risk now priced into any hardware relying on Chinese inputs.
Wednesday's vote represents a widening of President Donald Trump's administration's crackdown on Chinese technology gear. Last month, the FCC banned imports of additional equipment from a group of Chinese manufacturers effective July 16. On Tuesday, the agency proposed prohibiting the import of most military-grade drones, building on recent bans targeting new foreign drone and router models.
Telecom carriers and data center operators should prepare for further regulatory action. The FCC is considering a rule that would prohibit US telecommunications carriers from interconnecting with Chinese telecom firms deemed national security risks. This includes blocking Chinese companies that own US data centers or Points of Presence at internet exchange points, a move that would effectively force them to shut down their American infrastructure operations.
