The global supply of chips to China's Huawei Technologies could be hit – by new measures agreed by senior officials in the Trump administration.
Sources familiar with the matter told Reuters the measures target foreign companies who use U.S. chipmaking equipment from the likes of KLA Corp, Lam Research and Applied Materials.
The firms would be required to obtain a U.S. license before supplying certain chips to Huawei.
The Chinese telecoms company was already blacklisted last year, limiting its suppliers.
One of the sources said the proposed rule-change would curb sales of chips to Huawei by TSMC, a major Taiwanese producer of chips for Huawei's HiSilicon unit.
It was unclear if President Donald Trump, who seemed to push back against the proposal last month, will sign off on the rule change.
The sources said it would deal a blow to Huawei and TSMC, hurting U.S. companies as well.
The move could anger Beijing, already unhappy about US efforts to compel allies like the UK to exclude Huawei from their 5G networks over spying concerns.
Huawei has denied the spying allegations.