The United States has revoked permission for Huawei Technologies Co. to purchase semiconductors from Qualcomm and Intel and further tightened export controls on Chinese telecommunications equipment makers, according to people familiar with the matter.
The license withdrawal will affect Huawei's U.S. sales of chips used in cell phones and laptops, said the people, who spoke on condition of anonymity to discuss the move. House Foreign Affairs Committee Chairman Michael McCaul acknowledged the administration's decision in an interview Tuesday. He said this measure is key to stopping China's advanced AI development.
“Any chips sold to Huawei will be blocked,” McCall, a Texas Republican, said after being briefed on the licensing decisions for Intel and Qualcomm. “We were always concerned that these two companies were getting a little too close to China.”
While the decision may not affect large quantities of chips, it underscores the US government's determination to limit China's access to a wide range of semiconductor technologies. Authorities are also considering sanctions against six Chinese companies suspected of supplying chips to Huawei, which has been on the U.S. trade restriction list since 2019.
The U.S. Department of Commerce confirmed the revocation of “certain licenses” for exports to Huawei, but did not provide further details. The Democratic government is under pressure to take further steps to thwart Huawei and other Chinese tech companies after signs of progress in the country's semiconductor development.
“We continually evaluate how we can best protect our national security and foreign policy interests,” the agency said in a statement Tuesday.
Qualcomm shares fell 0.9% to $180.15 on Tuesday following a Financial Times report about the license revocation. Intel's stock price was little changed at $30.68.
Qualcomm recently said its business with Huawei is already limited and will soon shrink to zero. It was allowed to supply Chinese companies with chips that provide older 4G network connectivity. Selling anything that enables more advanced 5G access is prohibited.
“This is small,” said Sanford C. Bernstein analyst Stacy Rasgon. “Qualcomm has already said that Huawei's operations will be discontinued anyway.”
Huawei is not on the list of Qualcomm's top 10 customers, according to Bloomberg Supply Chain Analysis. It is also not listed on Intel's list of top customers.
Rasgon said Huawei only ships about 5 million desktops and laptops a year, which is only 2% of the market, so even if Intel were to supply all of those processors. also pointed out that the impact on Intel's earnings would be minimal.
The United States is also pressuring its allies, including Japan, the Netherlands, South Korea and Germany, to tighten restrictions on the sale and maintenance of chip-making tools in China, with Huawei a primary target.
McCaul and other Republicans, including House Republican Conference Chair Elise Stefanik and Sen. Marco Rubio, called on the Commerce Department to revoke the companies' licenses to sell chips to Huawei. Their calls escalated after the company unveiled smartphones with advanced Chinese processors during Commerce Secretary Gina Raimondo's visit to China in August.
The Biden administration has launched an investigation into the “alleged” 7-nanometer chip. A teardown by Bloomberg revealed that the chip was made by Chinese chipmaker Semiconductor Manufacturing International. SMIC may have violated U.S. law if it supplied the chips to Huawei, a commercial official said. At the beginning of this year.
The chips are made using Dutch and American technology, and despite the Chinese government's efforts to build a fully domestic supply chain, China continues to rely on cutting-edge semiconductor manufacturing from foreign countries, according to a Bloomberg report. It was shown that there is a dependence on the tools.