The U.S. has revoked licenses that allowed companies including Intel and Qualcomm to ship chips used for laptops and handsets to sanctioned Chinese telecoms equipment maker Huawei Technologies. The revocation of these licenses was confirmed by the Commerce Department. Although the department did not disclose the names of the companies affected by the move, the revocation is believed to be in response to pressure from Republican lawmakers. The move comes after the release of Huawei’s first AI-enabled laptop, the MateBook X Pro, powered by Intel’s latest Core Ultra 9 processor.
The revocation of these licenses has implications for both Huawei and U.S. suppliers. Huawei relies on Intel chips to power its laptops, and losing access to these chips could significantly impact its business. Additionally, U.S. suppliers who do business with Huawei could also face challenges as a result of this move.
Huawei was placed on a U.S. trade restriction list in 2019 due to concerns about potential espionage. Being on this list means that Huawei’s suppliers have to obtain special licenses before shipping goods and technology to the company. However, despite these restrictions, Huawei’s suppliers, including Intel and Qualcomm, have received licenses worth billions of dollars to sell their products to the Chinese company.
Qualcomm, for example, has been selling older 4G chips to Huawei since receiving a license in 2020. However, the company does not expect to receive more chip revenue from Huawei beyond this year. Qualcomm also licenses its portfolio of 5G technologies to Huawei, and the current patent deal between the two companies is set to expire in Qualcomm’s fiscal 2025.
The move to revoke these licenses is seen as an effort to bolster U.S. national security and counter China’s technological advancements. Republican Congresswoman Elise Stefanik praised the action, stating that it will protect American ingenuity and diminish China’s ability to advance its technology.
Critics argue that these licenses have contributed to Huawei’s resurgence in the market. Despite export restrictions, Huawei has managed to release successful products, such as a new phone powered by a sophisticated chip manufactured by Chinese chipmaker SMIC. This has helped Huawei increase its smartphone sales and revenue.
The revocation of these licenses could have significant ramifications for both Huawei and U.S.-China trade relations. It remains to be seen how Huawei and its suppliers will navigate these new challenges.
