US Revokes Export Licenses for Huawei's 4G Chips: Heavy Blow to China

The license withdrawal comes after Huawei launched the MateBook X Pro in April, its first AI laptop, powered by Intel's new Core Ultra 9 processor

by Sededin Dedovic
SHARE
US Revokes Export Licenses for Huawei's 4G Chips: Heavy Blow to China
© Rebecca Noble / Getty Images

The United States has revoked licenses from companies such as Intel and Qualcomm to supply 4G chips for laptops and mobile phones to the Chinese telecommunications equipment manufacturer Huawei Technologies, three sources said.

"We have withdrawn certain export licenses to Huawei," the Ministry of Commerce said, without specifying which licenses were involved. An Intel spokesman declined to comment, Qualcomm did not respond to a request for comment on the license withdrawal, and Huawei did not immediately respond.

In 2019, Huawei was placed on the U.S. trade restriction list, based on concerns that Beijing could use its technology for espionage and military strengthening. Under the new regime, Washington required domestic suppliers to obtain special export licenses.

American companies secured licenses worth billions of dollars, including the particularly controversial green light from the Trump administration, which allowed Intel to supply central processing units for Huawei laptops from 2020.

The license withdrawal followed Huawei's April launch of the MateBook X Pro, its first AI laptop, powered by Intel's new Core Ultra 9 processor. "This move will strengthen U.S. national security, protect U.S. innovation, and limit the capacity of communist China to develop technology," Republican congresswoman Elise Stefanik said in a statement.

The Commerce Department's decision could harm both Huawei and American suppliers. Intel is grappling with weak demand for data center and desktop chips, and its market value fell by $11 billion in April, reflecting investor disappointment in revenue and profit forecasts for the second quarter.

Qualcomm sold older 4G mobile chips to Huawei under license for 2020. In a recent filing with regulators, the company stated that it no longer expects revenue from chip sales to the Chinese company from next year onwards. Qualcomm also signed an agreement with Huawei on patent rights governing the use of its portfolio of 5G technologies.

Last year, the Chinese company began using a 5G chip produced by its subsidiary HiSilicon. In the filing, Qualcomm stated that the patent agreement with Huawei expires at the beginning of fiscal year 2025 and that discussions are underway to extend it.

Critics argue that the licenses allowed the Chinese company to recover from the effects of U.S. sanctions. Huawei shocked the industry last summer with a new phone powered by a sophisticated chip from Chinese chipmaker SMIC.

The new phone propelled Huawei's sales, which jumped 64 percent in the first six weeks of this year compared to the same period last year, according to research firm Counterpoint.

Huawei China Intel
SHARE