Science & Technology

US Reportedly Revokes Several Export Licenses for Selling Semiconductors to Huawei

It became known that the United States revoked licenses that provided several companies, including Intel and Qualcomm, with the opportunity to supply chips used in laptops and smartphones to the Chinese manufacturer Huawei Technologies.

US Reportedly Revokes Several Export Licenses for Selling Semiconductors to Huawei

The relevant information was released to the media with reference to several insiders who are aware of Washington’s new measures against the mentioned company from an Asian country. It is worth noting that Huawei has been under sanctions from the United States for several years. Washington’s new decision, which was reported by insiders and which has not yet been clarified at the official level, means a decrease in the scale of US firms’ capabilities in the context of interaction with Chinese customers.

One of the media informants said that last Tuesday, May 7, some companies based in the United States received notification of the immediate revocation of licenses allowing them to cooperate with brands from China. On the same day, the US Department of Commerce confirmed the revocation of certain licenses for exports to Huawei but did not provide any specific data on this issue. It is not yet possible to reliably assert the formation of new realities for companies from the United States supplying chips to the mentioned company. Insider information needs to be clarified. At the same time, such a decision by Washington is natural from the point of view of the logic of the actions of the US authorities to limit China’s technological potential. The United States has already introduced a special export control regime, which does not provide for the possibility of supplying a wide range of the newest chips and equipment for the production of corresponding products to an Asian country.

An Intel representative did not provide any comment after receiving a request from the media for clarification or refutation of insider information about the revocation of licenses. Qualcomm also has chosen the tactic of silence. At the same time, a kind of information vacuum on the part of these companies should not be perceived as some kind of unambiguous and explicit answer to the question.

Insider data on the revocation of licenses appeared after Huawei presented the first enabled artificial intelligence laptop last month. This device is called the MateBook X Pro. The laptop is equipped with an Intel Core Ultra 9 processor. This fact provoked considerable indignation from US lawmakers who are members of the Republican Party. They said that the presence of the mentioned processor in the new Huawei laptop is a significant reason for speculation that the United States Department of Commerce has allowed Intel to supply chips to a Chinese company.

There have been calls in Congress to tighten export restrictions on the supply of components specifically to the mentioned Chinese company. This point of view is most characteristic of members of the Republican Party, who adhere to the so-called hawkish position that Washington should take measures to counter the development of Huawei. It is worth noting that this company has recently achieved significant technological success. Last year, Huawei presented the Mate 60 Pro smartphone with a new 7-nanometer Kirin 9000s chip. The debut of this device was extremely unpleasant news for many politicians in Washington. At that time, some congressmen made statements about the insufficiency of the United States’ efforts to limit China’s technological potential.

Last year, US Commerce Secretary Gina Raimondo said that Washington has no evidence that Huawei and other technology companies from the Asian country are capable of mass-producing advanced chips for smartphones. Also in 2023, Republican lawmakers led by Michael McCaul said that the Kirin 9000s was evidence of the ineffectiveness of United States Department of Commerce measures to reduce the ability of Chinese firms to access cut-edging microcircuits.

Burn J. Lin, former vice president of Taiwan Semiconductor Manufacturing Co., says that Washington will not be able to prevent the development of technology companies from the Asian country, including Huawei, in the chip-making area. According to him, the mentioned firms can use their old equipment to produce more complex silicon. He also suggests that the Chinese Semiconductor Manufacturing International Corp. is ready to make 5-nanometer microcircuits. Moreover, Burn J. Lin is convinced of Beijing’s ability for subsequent technological development, which is what can be called an increase in capabilities compared to the current potential in the corresponding sphere of activity. He says that the United States should focus on maintaining leadership in chip design, rather than limiting China in the relevant industry.

Republican Congresswoman Elise Stefanik said this year that Washington’s sanctions against Beijing would strengthen US national security, protect American ingenuity, and decrease the Asian country’s ability to advance its technology.

Revoking licenses to export chips from the United States to China could be a very sensitive factor in the negative impact on Huawei. This company still uses Intel microcircuits to power its laptops. The restrictions will also have a significant impact on US chip suppliers to China.

Intel is faced with the problem of low consumer demand for traditional microcircuits for data centers and personal computers. Last month, the company lost $11 billion on the stock market. The corresponding dynamic was recorded after Intel released its revenue and profit forecast for the second quarter of 2024, which turned out to be below preliminary market expectations.

Huawei was added to the United States sanctions list in 2019. As a result of the relevant actions of Washington, the ability of US companies to trade with this Chinese manufacturer was limited. The United States justified this decision with suspicions that Huawei may be involved in spying on Americans. Washington considered adding the company to the sanctions list as a measure as part of a broader effort aimed at hindering Beijing’s activities to strengthen its armed forces.

From a legal point of view, the United States has not imposed a complete ban on trade with Huawei. The relevant activity is possible provided that US companies receive a special license. But in fact, from the point of view of the specifics of the implementation of this mechanism in the practical plane, the possibility of interaction with Huawei is very limited.

At the same time, the Chinese company’s US suppliers have received licenses worth billions of dollars to sell goods and technologies. Also, the administration of former President of the United States Donald Trump issued a controversial authorization that allowed Intel to supply Huawei with central processing units for subsequent use in laptops from 2020.

Qualcomm has sold old 4G chips to Chinese cell phone manufacturers. The company received a license to carry out relevant activities in 2020. In May, Qualcomm announced that it does not expect an increase in revenue from the sale of Huawei chips after the current year. At the same time, the company is still licensing its 5G technology portfolio to the Chinese firm. It is worth noting that last year Huawei began using microcircuit 5G, designed by its unit HiSilicon, the operation of which, according to many experts, is carried out in violation of United States sanctions.

Qualcomm announced that its patent deal with the Chinese manufacturer expires at the beginning of the 2025 fiscal year. The company has also started negotiations to renew this deal. In the United States, some experts and politicians say that such licenses have contributed to the resurgence of Huawei.

Data from the research company Counterpoint shows that in the first six weeks of 2024, sales of smartphones from the Chinese manufacturer increased by 64% year-on-year. Also, the dynamic of the progress is currently demonstrating Huawei’s business of making components for smart cars.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.