US Revokes Licenses Allowing Huawei to Buy Semiconductors from Qualcomm and Intel
The US Tightens Export Restrictions on Huawei, Revokes Licenses for Qualcomm and Intel
In a move to further tighten export restrictions against Chinese telecom equipment maker Huawei Technologies Co., the US has revoked licenses allowing the company to buy semiconductors from Qualcomm Inc. and Intel Corp., according to sources familiar with the matter.
The decision will impact sales of chips used in Huawei phones and laptops, House Foreign Affairs Committee Chairman Michael McCaul confirmed in an interview on Tuesday. He emphasized that the move is crucial in preventing China from advancing in artificial intelligence technology.
“It’s blocking any chips sold to Huawei,” McCaul stated. “Those are two companies we’ve always worried about being a little too close to China.”
While the decision may not have a significant impact on chip sales volume, it underscores the US government’s commitment to limiting China’s access to semiconductor technology. Officials are also considering sanctions against six Chinese firms suspected of supplying chips to Huawei, which has been on a US trade restrictions list since 2019.
Following the ban, Intel expects revenue to fall below its previously guided range for the second quarter. Qualcomm also confirmed the revocation of one of its licenses to sell to Huawei and stated that it will comply with all applicable export control regulations.
The withdrawal of export licenses has been deemed as “economic coercion” by China’s Ministry of Commerce, which stated that it violates World Trade Organization rules. The US Commerce Department confirmed the license withdrawals but did not provide specific details.
Qualcomm recently mentioned that its business with Huawei is already limited and will soon diminish. The company has been permitted to supply Huawei with chips for older 4G network connections but is prohibited from selling chips for more advanced 5G access.
Despite the impact on Intel and Qualcomm, analysts believe that the overall effect on their earnings will be minimal. The US is also urging allies to tighten restrictions on selling and maintaining chip manufacturing tools in China, with Huawei as the main target.
Republican lawmakers have been pressuring the Commerce Department to revoke licenses for companies selling chips to Huawei, especially after the company unveiled a smartphone powered by an advanced, made-in-China processor. The Biden administration has launched an investigation into the chip’s origin and whether it violates US law.
Overall, the move to revoke licenses for Huawei reflects the ongoing tensions between the US and China in the tech sector, with implications for both companies and global semiconductor supply chains.