US Revokes Licenses For Supply Of Chips To China’s Huawei

The Biden administration has revoked export licenses that allow Intel and Qualcomm to supply Huawei with semiconductors as Washington increases the pressure on the Chinese telecoms equipment company, Financial Times reported.

The move by the US Department of Commerce affects the supply of chips for Huawei’s laptop computers and mobile phones, according to people familiar with the situation.

The commerce department confirmed to the Financial Times that it had “revoked certain licenses for exports to Huawei” but did not name which US companies would be affected.

“We continuously assess how our controls can best protect our national security and foreign policy interests, taking into consideration a constantly changing threat environment and technological landscape,” said a spokesperson for the department. “As part of this process, as we have done in the past, we sometimes revoke export licenses.”

One person familiar with the situation said the commerce department had notified the companies that would be affected, but did not provide details.

Washington already has tough restrictions on the sale of US technology to Huawei, but Republican lawmakers have urged President Joe Biden to take even tougher action against the Chinese group, which national security officials say helps Beijing engage in cyber espionage around the world. Huawei has denied the claims.

CNBC reported Huawei was placed on a U.S. trade blacklist in 2019, which banned U.S. firms from selling technology – including 5G chips – to the Chinese tech giant over national security concerns. In 2020, the U.S. tightened chip restrictions on Huawei, requiring foreign manufacturers using American chipmaking equipment to obtain a license before they can sell semiconductors to Huawei.

Huawei’s consumer business, which includes smartphones and laptops, is seeing a resurgence after launching the Mate 60 Pro smartphone in August.

A TechInsights analysis of Huawei’s Mate 60 Pro smartphone revealed an advanced chip made by China’s top chip maker, SMIC. The smartphone is also said to be equipped with 5G connectivity – a feature which U.S. sanctions had sought to block.

U.S. firms Qualcomm and Intel, are two of the companies that supply chips to Huawei. Qualcomm in an SEC filing earlier this moth said it expects operations to be “further impacted” from its customers, such as Huawei, developing their own chips. 

ArsTechnica reported the U.S. crackdown on exports to Huawei now includes even stronger restrictions than the company has already faced. The Financial Times reported that Intel and Qualcomm have had their Huawei export licenses revoked, so Huawei will no longer be able to buy chips from either company.

The export ban has been around since 2020 and means that any company wishing to ship parts to Huawei must get approval from the government on a case-by-case basis. Sometimes these come with restrictions, like Qualcomm’s license, which allowed it to ship smartphone chips to Huawei, but not “5G” chips. 

That led to Qualcomm creating special 4G-only versions of its 5G chips for Huawei, and the company ended up with 4G-only Snapdragon 888 phones in 2021.

In my opinion, this is not the first time the U.S. government placed restrictions on companies who wanted to send 4G or 5G chips to China. It seems like Huawei “keeps turning up like a bad penny”.