US Cuts Off Huawei's Chip Supply By Revoking Qualcomm And Intel Licenses

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The United States government continues to scrutinize the access Chinese telecom giant Huawei has to American made chips. This time around the licenses obtained by Intel and Qualcomm that gave the companies permission to sell to Huawei have been revoked. The companies were providing Huawei with chips that can be used in mobile devices, network equipment and laptops.

According to a report in Reuters, a source with knowledge of the matter states that the move to revoke the licenses is immediate and was put in place by the United States Commerce Department. However, both Intel and Qualcomm declined to comment regarding the situation.

Attention on Intel's and Qualcomm’s business dealings with Huawei got ratcheted up after the launch of the MateBook X Pro, a laptop with AI functionality using Intel’s Core Ultra 9 chip. The launch of this product caught the eye of Republicans in congress, who were not happy to see Huawei using American technology to develop the product.

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Elise Stefanik, a Republican congresswoman, said that “this action will bolster U.S. national security, protect American ingenuity, and diminish Communist China’s ability to advance its technology." Meanwhile, the Chinese government says that this move is “overstretching the concept of national security and abusing export controls to suppress Chinese companies without justification.”

These restrictions will hit all of the companies involved. Huawei still relies heavily on Intel for chips that go into the company’s laptops, and Intel could certainly use Huawei as a steady customer for its consumer chips. Meanwhile, Qualcomm is still expecting to renegotiate a deal regarding 5G technolgies according to Reuters. This revocation might spell trouble for that future deal.

Only time will tell if these restrictions actually achieve the goal of stopping Chinese companies from building cutting edge devices, or if all it does is hurt the financials of American companies in the short to medium term.