The United States will extend a reprieve given to Huawei Technologies that permits the Chinese firm to buy components from US companies to supply existing customers, but also moved to add more than 40 of Huawei's units to its economic blacklist.
The extension was announced on Monday by US Commerce Secretary Wilbur Ross, even though President Donald Trump suggested on Sunday that no such reprieve would be granted.
Shares of US chip makers that sell to Huawei rose, including chipmakers Qualcomm, Intel and Micron Technology.
The 90-day extension "is intended to afford consumers across America the necessary time to transition away from Huawei equipment, given the persistent national security and foreign policy threat," the Commerce Department said in a statement.
"As we continue to urge consumers to transition away from Huawei's products, we recognize that more time is necessary to prevent any disruption," said Ross.
Trump had indicated at the weekend there would be no extension, saying what would happen would be the "opposite" of what was reported last week. "We're actually open not to doing business with them," Trump said on Sunday.
The US government blacklisted Huawei in May, alleging the Chinese company is involved in activities contrary to US national security or foreign policy interests. Shortly after, the Commerce Department allowed Huawei to purchase some American-made goods in a move designed to minimize disruption for its customers.
Ross said the latest extension was to aid US customers, many of which operate networks in rural America.
At the same time he said he was adding 46 Huawei affiliates to the so-called "Entity List" - a list of companies effectively banned from doing businesses with US firms - raising the total number to more than 100 Huawei entities that are covered by the restrictions.
The list includes Huawei affiliates in Argentina, Australia, Belarus, China, Costa Rica, France, India, Italy, Mexico and numerous other countries.
Huawei did not reply to requests for comment.
The extension, through Nov. 18, renews an agreement continuing the Chinese company's ability to maintain existing telecommunications networks and provide software updates to Huawei handsets.