Licenses that allowed Huawei Technologies Co. to purchase semiconductors from Qualcomm Inc. and Intel Corp. have been revoked by the US.
This move represents a further tightening of export restrictions against the Chinese telecom equipment maker.
US Revokes Licenses Impacting Huawei Chip Sales
The withdrawal of the licenses has had a significant impact on the sales of chips used in Huawei phones and laptops in the US, as reported by anonymous sources.
Bloomberg reported that House Foreign Affairs Committee Chairman Michael McCaul confirmed the administration's decision in an interview on Tuesday.
According to McCaul, the decision is crucial in order to hinder China's progress in advanced AI. The US Commerce Department has confirmed the withdrawal of "certain licenses" for exports to Huawei, but they have chosen not to provide specific details.
The Democratic administration is facing increasing pressure to take stronger action against Huawei and other Chinese tech companies following recent advancements in the country's semiconductor development.
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Huawei Faces Fallout From Intel Chip Dependency
This decision may have negative consequences for Huawei, as they heavily depend on Intel chips to operate their laptops. Additionally, US suppliers who have business ties with the company may also be affected.
Intel has also been experiencing a decline in demand for its traditional data center and PC chips.
Last month, it experienced a significant decrease in stock market value after providing a forecast for second-quarter revenue and profit that fell below market expectations as Reuters reported.
In 2019, Huawei found itself on a US trade restriction list due to concerns about potential spying on Americans. This move was part of a larger strategy to limit China's ability to strengthen its military.
Being added to the list requires the company's suppliers to obtain a special license before shipping, which can be challenging to acquire.
Despite this, suppliers to Huawei have been granted licenses worth billions of dollars to sell goods and technology to the company. Nevertheless, Qualcomm continues to license its range of 5G technologies to Huawei.
Last year, Huawei started utilizing a 5G chip developed by its HiSilicon unit, which many analysts suspect is being manufactured in defiance of US sanctions. Based on a recent filing, Qualcomm has disclosed that its patent agreement with Huawei will expire ahead of Qualcomm's fiscal 2025.
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