The Trump administration is considering changing US regulations to allow it to block shipments of computer chips to Huawei Technologies from companies such as Taiwan’s TSMC, the world’s largest contract chipmaker, two sources familiar with the matter said.

New restrictions on commerce with China’s Huawei are among several options to be considered at high-level US meetings this week and next. The chip proposal has been drafted but its approval is far from certain, one of the sources said.

The measure would be a blow to the world’s second largest smartphone maker as well as to TSMC, a major producer of chips for Huawei’s HiSilicon unit and mobile phone rivals Apple Inc and Qualcomm Inc.

“What they’re trying to do is make sure that no chips go to Huawei that they can possibly control,” the second source said.

Huawei is at the heart of a battle for global technological dominance between the United States and China. The United States is trying to convince allies to exclude its gear from next generation 5G networks on grounds its equipment could be used by China for spying. Huawei has repeatedly denied the claim.

Europe replicated in Huawei City, China Show all 8 1 /8 Europe replicated in Huawei City, China Europe replicated in Huawei City, China Karl Theodor Bridge in Heidelberg, Germany Old Bridge Gate on Karl Theodor Bridge in Heidelberg, Baden-Wurttemberg, Germany Getty Europe replicated in Huawei City, China Replica Karl Theodor Bridge in Huawei City, China DONGGUAN, CHINA - APRIL 24: Huawei workers walk by large statues of horses at the sprawling 'Ox Horn' Research and Development campus on April 24, 2019 in Dongguan, near Shenzhen, China. Huawei is Chinas most valuable technology brand, and sells more telecommunications equipment than any other company in the world, with annual revenue topping $100 billion U.S. Headquartered in the southern city of Shenzhen, considered Chinas Silicon Valley, Huawei has more than 180,000 employees worldwide, with nearly half of them engaged in research and development. In 2018, the company overtook Apple Inc. as the second largest manufacturer of smartphones in the world behind Samsung Electronics, a milestone that has made Huawei a source of national pride in China. While commercially successful and a dominant player in 5G, or fifth-generation networking technology, Huawei has faced political headwinds and allegations that its equipment includes so-called backdoors that the U.S. government perceives as a national security. U.S. authorities are also seeking the extradition of Huaweis Chief Financial Officer, Meng Wanzhou, to stand trial in the U.S. on fraud charges. Meng is currently under house arrest in Canada, though Huawei maintains the U.S. case against her is purely political. Despite the U.S. campaign against the company, Huawei is determined to lead the global charge toward adopting 5G wireless networks. It has hired experts from foreign rivals, and invested heavily in R&D to patent key technologies to boost Chinese influence. (Photo by Kevin Frayer/Getty Images) Getty Europe replicated in Huawei City, China Heidelberg, Germany "Location: Heidelberg, Germany." Getty Europe replicated in Huawei City, China Replica Heidelberg in Huawei City, China DONGGUAN, CHINA - APRIL 25: Huawei's new sprawling 'Ox Horn' Research and Development campus is seen from the air on April 25, 2019 in Dongguan, near Shenzhen, China.Huawei is Chinas most valuable technology brand, and sells more telecommunications equipment than any other company in the world, with annual revenue topping $100 billion U.S. Headquartered in the southern city of Shenzhen, considered Chinas Silicon Valley, Huawei has more than 180,000 employees worldwide, with nearly half of them engaged in research and development. In 2018, the company overtook Apple Inc. as the second largest manufacturer of smartphones in the world behind Samsung Electronics, a milestone that has made Huawei a source of national pride in China. While commercially successful and a dominant player in 5G, or fifth-generation networking technology, Huawei has faced political headwinds and allegations that its equipment includes so-called backdoors that the U.S. government perceives as a national security. U.S. authorities are also seeking the extradition of Huaweis Chief Financial Officer, Meng Wanzhou, to stand trial in the U.S. on fraud charges. Meng is currently under house arrest in Canada, though Huawei maintains the U.S. case against her is purely political. Despite the U.S. campaign against the company, Huawei is determined to lead the global charge toward adopting 5G wireless networks. It has hired experts from foreign rivals, and invested heavily in R&D to patent key technologies to boost Chinese influence. (Photo by Kevin Frayer/Getty Images) Getty Europe replicated in Huawei City, China Cesky Krumlov, Czech Republic Cesky Krumlov cityscape Getty Europe replicated in Huawei City, China Replica Cesky Krumlov in Huawei City, China DONGGUAN, CHINA - APRIL 25: Huawei's new sprawling 'Ox Horn' Research and Development campus is seen from the air on April 25, 2019 in Dongguan, near Shenzhen, China.Huawei is Chinas most valuable technology brand, and sells more telecommunications equipment than any other company in the world, with annual revenue topping $100 billion U.S. Headquartered in the southern city of Shenzhen, considered Chinas Silicon Valley, Huawei has more than 180,000 employees worldwide, with nearly half of them engaged in research and development. In 2018, the company overtook Apple Inc. as the second largest manufacturer of smartphones in the world behind Samsung Electronics, a milestone that has made Huawei a source of national pride in China. While commercially successful and a dominant player in 5G, or fifth-generation networking technology, Huawei has faced political headwinds and allegations that its equipment includes so-called backdoors that the U.S. government perceives as a national security. U.S. authorities are also seeking the extradition of Huaweis Chief Financial Officer, Meng Wanzhou, to stand trial in the U.S. on fraud charges. Meng is currently under house arrest in Canada, though Huawei maintains the U.S. case against her is purely political. Despite the U.S. campaign against the company, Huawei is determined to lead the global charge toward adopting 5G wireless networks. It has hired experts from foreign rivals, and invested heavily in R&D to patent key technologies to boost Chinese influence. (Photo by Kevin Frayer/Getty Images) Getty Europe replicated in Huawei City, China Heidelberg, Germany Travel in Germany - cityscape of picturesque historic Heidelberg Getty Europe replicated in Huawei City, China Replica Heidelberg in Huawei City, China DONGGUAN, CHINA - APRIL 12: Huawei's new sprawling 'Ox Horn' Research and Development campus is seen from the air on April 12, 2019 in Dongguan, near Shenzhen, China. Huawei is Chinas most valuable technology brand, and sells more telecommunications equipment than any other company in the world, with annual revenue topping $100 billion U.S. Headquartered in the southern city of Shenzhen, considered Chinas Silicon Valley, Huawei has more than 180,000 employees worldwide, with nearly half of them engaged in research and development. In 2018, the company overtook Apple Inc. as the second largest manufacturer of smartphones in the world behind Samsung Electronics, a milestone that has made Huawei a source of national pride in China. While commercially successful and a dominant player in 5G, or fifth-generation networking technology, Huawei has faced political headwinds and allegations that its equipment includes so-called backdoors that the U.S. government perceives as a national security. U.S. authorities are also seeking the extradition of Huaweis Chief Financial Officer, Meng Wanzhou, to stand trial in the U.S. on fraud charges. Meng is currently under house arrest in Canada, though Huawei maintains the U.S. case against her is purely political. Despite the U.S. campaign against the company, Huawei is determined to lead the global charge toward adopting 5G wireless networks. It has hired experts from foreign rivals, and invested heavily in R&D to patent key technologies to boost Chinese influence. (Photo by Kevin Frayer/Getty Images) Getty

To target global computer chip sales to Huawei, US authorities would alter the Foreign Direct Product Rule, which subjects some foreign-made goods based on US technology or software to US regulations.

Reuters reported possible changes to that rule in November.

Under the draft proposal, the US government would force foreign companies that use US chipmaking equipment to seek a US licence before supplying Huawei – a major expansion of export control authority that could anger US allies worldwide.

The US Commerce Department declined to comment on the proposal.

But a Commerce Department spokesperson said recent US charges against Huawei, including conspiring to steal trade secrets, “reaffirm the need for caution in considering license applications. The US continues to have major concerns about Huawei.”

Huawei did not respond to requests for comment.

A spokesperson for TSMC said the company does not answer “hypothetical” questions and does not comment on individual customers.

The United States placed Huawei on a blacklist in May last year, citing national security concerns. That forced some US and foreign companies to seek special licenses from the Commerce Department to sell to it, but China-sceptics in the US government have been frustrated by the vast number of supply chains beyond their reach.

Others in the Trump administration fear antagonising Beijing, which just signed a trade deal with Washington. They also worry the restrictions will drive innovation offshore and benefit foreign rivals.

Most chip manufacturers rely on equipment produced by US companies like KLA, Lam Research and Applied Materials, according to a report last year from China’s Everbright Securities.

“There is no production line in China that uses only equipment made in China, so it is very difficult to make any chipsets without US equipment,” the report read.