US Revokes Intel, Qualcomm Licenses to Sell Chips to Huawei

Signage at a Huawei Technologies Co. store in Shanghai, China, on Friday, May 3, 2024. Huawei, the Chinese telecommunications giant blacklisted by the US, is secretly funding cutting-edge research at American universities including Harvard through an independent Washington-based foundation.

(Bloomberg) — The US has revoked licenses allowing Huawei Technologies Co. to buy semiconductors from Qualcomm Inc. and Intel Corp., according to people familiar with the matter, further tightening export restrictions against the Chinese telecom equipment maker.

Withdrawal of the licenses affects US sales of chips for use in Huawei phones and laptops, according to the people, who discussed the move on condition of anonymity. House Foreign Affairs Committee Chairman Michael McCaul confirmed the administration’s decision in an interview Tuesday. He said the move is key to preventing China from developing advanced AI.

“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.”

The US Commerce Department confirmed the withdrawal of “certain licenses” for exports to Huawei, but declined to offer specifics. “We continuously assess how our controls can best protect our national security and foreign policy interests,” the agency said in a statement Tuesday.

Qualcomm shares slipped 0.9% Tuesday to $180.15 following a Financial Times report earlier in the day on the license revocation. Intel’s stock was little changed, at $30.68.

Qualcomm recently said that its business with Huawei is already limited and will soon shrink to nothing. It has been allowed to supply the Chinese company with chips that provide older 4G network connections. It’s prohibited from selling ones that allow 5G access.

Huawei doesn’t rank in Qualcomm’s list of top 10 customers, according to Bloomberg supply chain analysis. It also doesn’t feature in Intel’s list of top customers.

The decision marks the latest US move to curtail China’s access to semiconductor technology. Officials are also considering sanctions against six Chinese firms that they suspect could supply chips to Huawei, which has been on a US trade restrictions list since 2019.

Read more about Huawei and the US-China tech war:

The US is also pressing allies including Japan, the Netherlands, South Korea and Germany to tighten curbs on selling and maintaining chip manufacturing tools in China — with Huawei as the main target of that effort.

McCaul and other Republican lawmakers, including House Republican Conference Chairwoman Elise Stefanik and Senator Marco Rubio, have urged Commerce to revoke licenses for companies to sell chips to Huawei. Their calls escalated after the company 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 opened a probe into the “purported” 7-nanometer chip, which a Bloomberg teardown revealed was made by Chinese chipmaker Semiconductor Manufacturing International Corp. SMIC may have violated US law if it supplied that chip to Huawei, a Commerce official said earlier this year.

The chip was manufactured using Dutch and American technology, Bloomberg has reported, indicating that China is still reliant on foreign tools to produce its most advanced semiconductors despite Beijing’s efforts to build a full domestic supply chain.

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