U.S. stops some export licenses to sell chips to Huawei in a bid to curb China’s tech power

U.S. stops some export licenses to sell chips to Huawei in a bid to curb China’s tech power

MAY 7 2024

The U.S. on Tuesday said it stopped certain licenses to sell chips to China’s Huawei, in its latest efforts to curb China’s tech power.

• “As part of this process, as we have done in the past, we sometimes revoke export licenses,” a Commerce spokesperson said, declining to comment on specific licenses. “But we can confirm that we have revoked certain licenses for exports to Huawei.”
• Huawei’s consumer business is seeing a resurgence after launching the Mate 60 Pro smartphone in August.
  

  The U.S. has revoked certain licenses for chip exports to Chinese tech giant Huawei, the Commerce Department told CNBC on Tuesday, in its latest efforts to curb China’s tech power.

  “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,” a Commerce spokesperson said in a statement.

  

  
  

  “As part of this process, as we have done in the past, we sometimes revoke export licenses,”  the spokesperson said, declining to comment on specific licenses. “But we can confirm that we have revoked certain licenses for exports to Huawei.”

  Huawei was placed on a U.S. trade blacklist in 2019, which banned U.S. firms from selling technology – including 5G chips – to the Chinese tech giant over national security concerns. In 2020, the U.S. tightened chip restrictions on Huawei, requiring foreign manufacturers using American chipmaking equipment to obtain a license before they can sell semiconductors to Huawei.

  Huawei’s consumer business, which includes smartphones and laptops, is seeing a resurgence after launching the Mate 60 Pro smartphone in August.

  

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  Biden administration reportedly revoking certain licenses for exports to Huawei

  A TechInsights analysis of Huawei’s Mate 60 Pro smartphone revealed an advanced chip made by China’s top chip maker, SMIC. The smartphone is also said to be equipped with 5G connectivity – a feature which U.S. sanctions had sought to block.

  U.S. chip firms Qualcomm and Intel are two of the companies that supply chips to Huawei. Qualcomm in an SEC filing earlier this month said it expects operations to be “further impacted” from its customers, such as Huawei, developing their own chips.

  “While we have continued to sell integrated circuit products to Huawei under our licenses, we do not expect to receive product revenues from Huawei beyond the current calendar year,” Qualcomm said.

  “Additionally, to the extent that Huawei’s 5G devices take share from Chinese original equipment manufacturers that utilize our 5G products or from non-Chinese OEMs that utilize our 5G products in devices they sell into China, our revenues, results of operations and cash flows could be further impacted,” Qualcomm said.

  Last month, Huawei launched a fresh lineup of phones – the Pura 70 series – in a bid to challenge Apple in China.

  Apple is facing pressure from Huawei in China as iPhone sales plunged 19.1% in the first quarter while Huawei’s smartphone sales soared 69.7%, according to Counterpoint Research.

  Huawei’s net profit in 2023 grew by 144.5% from a year ago to 87 billion yuan (about $12 billion) partially helped by the sales of Mate 60 Pro in China, the firm revealed in March.