Micron Industries announced at a recent event that they will be stopping selling components to Huawei as of September 14, 2020. The company had previously been allowed to supply Huawei after restrictions had been placed on that company late last year, Semi Media reported.

Huawei accounted for 13% of Micron’s chip sales in previous years, though recently that number had dropped to as low as 10%. Given Micron’s yearly sales in 2019 were $23.4 billion, and despite the impact of the pandemic this year they have forecasted sales to be around $20 billion; the loss of Huawei purchases could cost the company as much as $2 billion.

“Micron is the leading memory chip manufacturer in the United States. Its memory market share ranks third in the world, and flash memory chips rank fifth in the world,” Semi Media noted.

The rules on sales to Huawei are expected to be changed again September 15 and Micron Industries has decided to stop supplying chips to the company in anticipation of the stricter rules.

“The new rules prohibit non-U.S. companies from selling any chips made using U.S. technology to Huawei without a special license. The rule covers even widely available, off-the-shelf chips made by overseas firms, placing potentially severe new limits on Huawei’s ability to source parts,” the Wall Street Journal reported.

President Trump and the national security community have stated the company’s telecom equipment could be used to spy on Americans. Huawei denies these allegations, the WSJ noted.

The updated restrictions are being made to close some loopholes in the existing ban.

“The Trump Administration sees Huawei for what it is — an arm of the Chinese Communist Party’s (CCP’s) surveillance state — and we have taken action accordingly,” Secretary of State Mike Pompeo said in a statement on the Department of State website. “We will not tolerate efforts by the CCP to undermine the privacy of our citizens, our businesses’ intellectual property, or the integrity of next-generation networks worldwide.”

Pompeo said the rule change “will prevent Huawei from circumventing U.S. law through alternative chip production and provision of off-the-shelf chips.” He added: “Huawei has continuously tried to evade” U.S. restrictions.