US Revokes Export Licenses for Semiconductor Sales to Huawei
The US has revoked licenses for companies to sell semiconductors to Huawei, causing potential harm to the Chinese tech giant and US suppliers.
US Revokes Export Licenses for Semiconductor Sales to Huawei
The United States has revoked licenses that allowed companies such as Intel and Qualcomm to ship chips to Chinese telecoms equipment maker Huawei, according to three people familiar with the matter. This move by the US Commerce Department comes after pressure from Republican China hawks in Congress who have been urging the Biden administration to take tougher action against Huawei.
What Does This Mean for Huawei?
The revocation of export licenses could potentially harm Huawei, as the company still relies on Intel chips to power its laptops. It could also have negative effects on US suppliers who do business with Huawei. Additionally, the move could hurt Intel, which has been facing weak demand for its traditional data center and PC chips.
The Background
Huawei was placed on a US trade restriction list in 2019 amid concerns of spying on Americans. This was part of a broader effort to hinder China's military advancements. Being on this list means that Huawei's suppliers must obtain a special, difficult-to-obtain license before shipping goods to the company.
Controversial Licenses
Despite being on the trade restriction list, suppliers to Huawei have still received licenses worth billions of dollars to sell goods and technology to the company. This includes a particularly controversial authorization issued by the Trump administration, which allowed Intel to ship central processors to Huawei for use in its laptops since 2020. Qualcomm has also sold older 4G chips to Huawei, but in a regulatory filing earlier this month, they stated that they do not expect to receive more chip revenue from the company beyond this year. However, Qualcomm still licenses its portfolio of 5G technologies to Huawei and is currently negotiating to renew the deal.
Potential Future Implications
The revocation of export licenses could have long-lasting implications for Huawei and its suppliers. Huawei's smartphone sales had already been on the rise, thanks in part to licenses granted by the US. With this latest move, it remains to be seen how the company will continue to grow and innovate. This could also have an impact on US companies, such as Intel, who may lose out on potential revenue from Huawei.
In Conclusion
The US revoking export licenses for semiconductor sales to Huawei is the latest development in the ongoing battle between the US and China's tech giants. It remains to be seen how this will affect Huawei's business and the relationship between the US and China. But one thing is clear, this move could have far-reaching consequences for both the tech industry and international relations.
