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US revokes Intel, Qualcomm's export licenses to sell to China's Huawei, sources say
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US revokes Intel, Qualcomm's export licenses to sell to China's Huawei, sources say
May 7, 2024 10:13 PM

WASHINGTON/SINGAPORE, May 7 (Reuters) - The U.S. has

revoked licenses that allowed companies including Intel ( INTC )

and Qualcomm ( QCOM ) to ship chips used for laptops and

handsets to sanctioned Chinese telecoms equipment maker Huawei

Technologies, three people familiar with the matter said.

A fourth person said some of the companies were notified on

Tuesday that their licenses were revoked effective immediately.

The U.S. Commerce Department earlier in the day confirmed it had

revoked some licenses but stopped short of naming the companies.

A spokesperson for Intel ( INTC ) declined to comment. Qualcomm ( QCOM ) did

not respond to a request for comment and Huawei did not

immediately respond.

The move comes after the release last month of Huawei's

first AI-enabled laptop, the MateBook X Pro powered by Intel's ( INTC )

new Core Ultra 9 processor.

The laptop launch drew fire from Republican lawmakers, who

said it suggested to them that the Commerce Department had given

the green light to Intel ( INTC ) to sell the chip to Huawei.

"We have revoked certain licenses for exports to Huawei,"

the Commerce Department said in a statement, declining to

specify which ones it had withdrawn.

The Commerce Department's move, first reported by Reuters,

comes after concerted pressure by Republican China hawks in

Congress who have been urging the Biden administration to take

tougher action to thwart Huawei.

"This action will bolster U.S. national security, protect

American ingenuity, and diminish Communist China's ability to

advance its technology," Republican Congresswoman Elise Stefanik

said in a statement.

The move could hurt Huawei which still relies on Intel ( INTC ) chips

to power its laptops, and could hurt U.S. suppliers that do

business with the company.

Intel ( INTC ) has also been facing weak demand for its traditional

data center and PC chips. Last month, it lost $11 billion in

stock market value after forecasting second-quarter revenue and

profit below market estimates.

Huawei was placed on a U.S. trade restriction list in 2019

amid fears it could spy on Americans, part of a broader effort

to handicap China's ability to bolster its military. Being added

to the list means the company's suppliers have to seek a

special, difficult-to-obtain license before shipping.

Even so, suppliers to Huawei have received licenses worth

billions of dollars to sell Huawei goods and technology,

including one particularly controversial authorization, issued

by the Trump administration, which has allowed Intel ( INTC ) to ship

central processors to Huawei for use in its laptops since 2020.

Qualcomm ( QCOM ) has sold older 4G chips to handsets since receiving

a license from U.S. officials in 2020. In regulatory filing

earlier this month, Qualcomm ( QCOM ) had said it did not expect to

receive more chip revenue from Huawei beyond this year.

However, Qualcomm ( QCOM ) still licenses its portfolio of 5G

technologies to Huawei, which last year began using a 5G chip

designed by its HiSilicon unit that most analysts believe is

manufactured in violation of U.S. sanctions. Qualcomm ( QCOM ) said in

the filing this month that its patent deal with Huawei expires

early in Qualcomm's ( QCOM ) fiscal 2025 and that it has started

negotiations to renew the deal.

Critics argue such licenses have contributed to the

company's resurgence. Huawei shocked industry last August with a

new phone powered by a sophisticated chip manufactured by

Chinese chipmaker SMIC, despite U.S. export

restrictions on both companies.

The phone helped Huawei smartphone sales spike 64% year on

year in the first six weeks of 2024, according to research firm

Counterpoint. Its smart car component business has also

contributed to Huawei's resurgence, with the company notching

its fastest revenue growth in four years in 2023.

(Reporting by Alexandra Alper, David Shepardson, Karen

Freifeld, Stephen Nellis, Chris Sanders and Fanny Potkin;

Additional reporting by David Kirton; Editing by Daniel Wallis

and Lincoln Feast.)

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