The United States has revoked licenses that allowed companies like Intel and Qualcomm to ship chips to sanctioned Chinese telecoms equipment maker Huawei Technologies. Some companies were notified on Tuesday that their licenses were revoked immediately, although the Commerce Department did not name the companies. Intel declined to comment, Qualcomm did not respond to requests for comment, and Huawei did not respond right away. This action follows the release of Huawei’s first AI-enabled laptop, the MateBook X Pro, powered by Intel’s new Core Ultra 9 processor, which drew criticism from Republican lawmakers for suggesting that the Commerce Department had approved Intel to sell the chip to Huawei.
The move by the Commerce Department to revoke licenses for exports to Huawei was prompted by pressure from Republican China hawks in Congress, aiming to take tougher action against Huawei. The decision is seen as bolstering US national security, protecting American ingenuity, and hindering Communist China’s technological advancement. However, this could impact Huawei’s reliance on Intel chips for its laptops and hurt US suppliers doing business with the company. Intel, which has been facing weak demand for its traditional chips, lost $11 billion in stock market value after forecasting lower-than-expected revenue and profit last month.
Huawei was placed on a US trade restriction list in 2019 amidst concerns of spying on Americans, as part of an effort to hinder China’s military advancements. Despite the trade restrictions, suppliers to Huawei have received licenses worth billions of dollars to sell goods and technology to the company. Qualcomm, for instance, has sold older 4G chips to handset makers with a license from US officials in 2020. While Qualcomm does not expect more chip revenue from Huawei beyond this year, it still licenses its 5G technologies to Huawei and is negotiating a renewal of their patent deal.
Critics argue that such licenses have contributed to Huawei’s resurgence, as the company has managed to continue its operations and even achieve significant growth in smartphone sales and smart car components. Despite export restrictions on both Huawei and Chinese chipmaker SMIC, Huawei was able to release a new phone powered by a sophisticated chip manufactured by SMIC, leading to a significant spike in smartphone sales. Additionally, Huawei’s smart car component business has also contributed to the company’s resurgence, with the fastest revenue growth in four years recorded in 2023. The impact of the revoked licenses on Huawei and its suppliers remains to be seen.