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The United States has revoked licenses that previously allowed Huawei Technologies Co. to procure semiconductors from Qualcomm Inc. and Intel Corp., according to individuals familiar with the matter. This move represents a further tightening of export restrictions against the Chinese telecom equipment maker.
The withdrawal of these licenses impacts the sale of chips for use in Huawei phones and laptops within the United States, according to the sources, who spoke on condition of anonymity. House Foreign Affairs Committee Chairman Michael McCaul confirmed the administration’s decision in an interview on Tuesday, stating that the move is essential to preventing China from advancing in advanced AI technology. “It’s blocking any chips sold to Huawei,” said McCaul, a Texas Republican who was briefed about the license decisions for Intel and Qualcomm. “Those are two companies we’ve always worried about being a little too close to China.”
While the decision may not significantly affect the volume of chips, it underscores the US government’s determination to limit China’s access to a broad range of 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.
The US Commerce Department confirmed the withdrawal of “certain licenses” for exports to Huawei but declined to provide specific details. The Democratic administration has faced pressure to do more to restrict Huawei and other Chinese tech companies following signs of progress in China’s semiconductor development. “We continuously assess how our controls can best protect our national security and foreign policy interests,” the agency said in a statement on Tuesday.
Following a report by the Financial Times earlier in the day regarding the license revocation, Qualcomm shares fell 0.9% on Tuesday to $180.15, while Intel's stock remained relatively unchanged at $30.68.
Qualcomm recently stated 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 those that enable more advanced 5G access.
Stacy Rasgon, an analyst at Sanford C. Bernstein, commented, “This is minor,” noting that Qualcomm has already indicated that its Huawei business is dwindling. Huawei does not rank among Qualcomm's top 10 customers, according to Bloomberg supply chain analysis. It also does not appear on Intel's list of top customers. Rasgon pointed out that Huawei ships only about five million desktop and notebook computers annually, accounting for 2% of the market. Therefore, even if Intel has been supplying all the processors for those devices, the impact on Intel's earnings will be minimal.
The US is also urging allies, including Japan, the Netherlands, South Korea, and Germany, to tighten restrictions on selling and maintaining chip manufacturing tools in China, with Huawei being the primary target of these efforts.
McCaul and other Republican lawmakers, including House Republican Conference Chairwoman Elise Stefanik and Senator Marco Rubio, have called on the Commerce Department to revoke licenses for companies selling chips to Huawei. Their demands intensified after Huawei unveiled a smartphone powered by an advanced, made-in-China processor while Commerce Secretary Gina Raimondo was visiting China in August.
The Biden administration has launched an investigation into the “purported” 7-nanometer chip, which a Bloomberg teardown revealed was produced by Chinese chipmaker Semiconductor Manufacturing International Corp. Earlier this year, a Commerce official said SMIC may have violated US law if it supplied that chip to Huawei. Bloomberg reported that the chip was manufactured using Dutch and American technology, indicating that China still relies on foreign tools to produce its most advanced semiconductors despite Beijing's efforts to establish a complete domestic supply chain.