U.S. Revokes Chip Export Licenses for Huawei, Stirring Debate and Impacting Industry

U.S. Revokes Licenses:

The United States has taken a significant step by revoking licenses that permitted companies like Intel and Qualcomm to export chips used in laptops and handsets to Huawei Technologies, a Chinese telecoms equipment maker. Three sources familiar with the matter confirmed this move, indicating a stricter stance on trade relations with Huawei.

Immediate Revocation:

A fourth source revealed that some companies were informed of the license revocation on Tuesday, effective immediately. While the U.S. Commerce Department confirmed the revocation of licenses, it refrained from disclosing the names of the affected companies.

Industry Response:

Intel and Qualcomm, two key players in the semiconductor industry, refrained from immediate comment on the matter. Likewise, Huawei did not provide an immediate response to the development.

Political Implications:

The move follows Huawei’s recent release of its first AI-enabled laptop, the MateBook X Pro, powered by Intel’s new Core Ultra 9 processor. This launch drew criticism from Republican lawmakers, raising questions about the Commerce Department’s approval of chip sales to Huawei.

Commerce Department Statement:

The Commerce Department acknowledged the license revocations but did not specify the companies affected. This action aligns with increased pressure from Republican lawmakers urging stricter measures against Huawei to safeguard U.S. national security interests.

Potential Impact:

The revocation of licenses could have significant repercussions, affecting Huawei’s reliance on Intel chips for its laptops and impacting U.S. suppliers engaged in business with the Chinese company.

Chinese Response:

China expressed opposition to the U.S.’s use of export controls to suppress Chinese companies, emphasizing its stance against perceived overreach in the name of national security.

Background on Huawei:

Huawei was placed on a U.S. trade restriction list in 2019 over concerns related to national security and espionage. The company’s inclusion on the list necessitates special licenses for its suppliers to conduct business with it.

License History:

Despite being on the trade restriction list, Huawei’s suppliers have obtained licenses worth billions of dollars to supply goods and technology to the company. Notably, Intel has been shipping central processors to Huawei for use in its laptops since 2020 under a controversial authorization issued during the Trump administration.

Qualcomm’s Situation:

Qualcomm, another major chip supplier, has sold older 4G chips to Huawei since 2020 but does not expect further chip revenue from the company beyond this year. However, Qualcomm still licenses its portfolio of 5G technologies to Huawei, with negotiations underway for a renewal.

Industry Impact and Criticism:

Critics argue that such licenses have contributed to Huawei’s resurgence, evident in its smartphone sales and smart car component business, despite export restrictions. The company’s recent growth highlights the complexities of international trade dynamics and the challenges posed by geopolitical tensions.