The United States annuls specific permits for exporting semiconductors to China's Huawei.
A fourth individual reported that on Tuesday, some companies were informed their licenses were terminated immediately. The U.S. Commerce Department acknowledged revoking some licenses yet neglected to mention which businesses were involved.
Intel's (INTC) representative refused to comment, while Qualcomm (QCOM) didn't respond to a query and Huawei failed to provide a response promptly.
The revelation coincides with Huawei unveiling its first Artificial Intelligence-operated laptop, the MateBook X Pro powered by Intel's latest Core Ultra 9 processor.
The desktop launch sparked discontent from Republican representatives, who thought it signaled Intel had received permission from the Commerce Department to ship the chip to Huawei.
"We have withdrawn specific licenses for exports to Huawei," the Commerce Department stated, without specifying which licenses they had rescinded.
This decision, initially reported by Reuters, comes under the influence of Republican China hawks in Congress who have been pushing the Biden administration to imply harsher restrictions against Huawei.
"This move will reinforce US national security, protect American innovation, and hinder Chinese Communist Party's capacity to enhance its technology," Republican Representative Elise Stefanik said in a statement.
This action may jeopardize Huawei's access to Intel chips required to function its laptops, and could negatively impact US suppliers conducting business with the company.
Intel has also been grappling with reduced demand for its customary data center and personal computer chips. Recently, it suffered a setback worth $11 billion in stock market value after projecting second-quarter revenue and earnings below market anticipation.
Licensing Required
In May 2019, Huawei was added to a US trade restriction list, raising concerns that it might spy on US citizens. This listing necessitates Huawei's suppliers to request a complicated-to-obtain license to export goods or technology to the company.
Even though suppliers have received licenses worth billions of dollars to provide products to Huawei, Intel has faced recent challenges in securing such licenses. In 2020, the previous administration permitted Intel to supply main processors to Huawei for its laptops.
Qualcomm has been providing 4G chips to handset manufacturers since obtaining a license from US officials that year. In a recent filing, Qualcomm stated that it did not expect to gather additional chip revenue from Huawei beyond this year. However, Qualcomm continues to license its 5G tech portfolio to Huawei, which employed a 5G chip manufactured by its HiSilicon division suspected of violating US sanctions last year. Qualcomm noted in the filing that their patent agreement with Huawei expires early in Qualcomm's fiscal 2025, and they have started discussing an extension of the deal.
Some critics suggest these licenses have fostered Huawei's resurgence. In August 2021, Huawei surprised the sector with a new phone equipped with an advanced 5G chip manufactured by Chinese semiconductor manufacturer SMIC, even with US export limitations on both companies. The smartphone aided Huawei smartphone sales spiked 64% year on year from January to mid-2024, according to analysts at Counterpoint. Huawei's smart car components business additionally contributed to the company's resurgence, recording its fastest revenue rise in four years in 2022.
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The Commerce Department's announcement could potentially impact tech companies that supply business-critical components, such as Intel, as their licenses for exporting to Huawei might be under review. Despite the challenges in obtaining licenses, some tech companies like Qualcomm continue to provide certain technology to Huawei, with plans to extend their patent agreement.
Source: edition.cnn.com
