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Last week, the US government revoked certain licenses that allowed American semiconductor companies to supply chips to Huawei. While the Commerce Department didn’t name the affected companies, Qualcomm and Intel were the two names on everyone’s mind. They have just confirmed the same. The firms revealed in their financial filing that Huawei is no longer purchasing advanced chips from them.
Qualcomm and Intel confirm the end of business with Huawei
After placing Huawei on the Entity List in 2019, putting it under strict trade regulations, the US government issued special export licenses to some semiconductor companies to continue business with the Chinese technology titan. However, last week, the US Department of Commerce revoked certain licenses for exports to Huawei. The department cited the same national security concerns as before.
“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. As part of this process, as we have done in the past, we sometimes revoke export licenses,” an official statement read. Huawei and Intel were expected to be the two most affected companies.
The firms confirmed that in their latest financial filing. Qualcomm said this license revocation ceases its supply of “4G and certain other integrated circuit products,” including “Wi-Fi products,” to Huawei and its affiliates and subsidiaries. The company doesn’t expect product revenue from the beleaguered Chinese conglomerate beyond 2024, confirming the end of business with it.
Intel’s filing says the Commerce Department has revoked “certain licenses for export of consumer-related items” to its customers in China. Since Intel doesn’t make smartphone chips, this likely applies to processors used in Huawei’s laptops. As GizmoChina points out, the chip giant may still be able to supply chips for non-consumer applications such as data center servers to the Chinese firm.
China has objected to these tightening trade restrictions on Huawei
The US government has always labeled Huawei a national security threat over its potential ties with the Chinese Communist Party, the sole ruling party in China. Unsurprisingly, the company has refuted the claims. It says the CCP doesn’t have any backdoors to its consumer data. However, the Biden administration continues to tighten trade restrictions on Huawei and China isn’t happy about it.
Following recent developments, the Chinese foreign ministry issued a statement saying, “China resolutely opposes the United States overstretching the concept of national security and abusing export controls to suppress Chinese companies without justification.” The US government is also planning a nationwide ban on TikTok, another Chinese firm. It will be interesting to see how Beijing reacts if it moves ahead with the plan.