Intel and Qualcomm Announce Immediate US Ban on Chip Sales to Huawei

Intel and Qualcomm recently confirmed the revocation of certain licenses for exports to Huawei, as reported in filings to the Securities and Exchange Commission. This move comes as a result of US export controls imposed on Huawei since 2019, restricting the Chinese tech giant's access to cutting-edge technologies. The restrictions were put in place due to concerns over dual-use technology that could potentially be utilized by the People's Liberation Army.

Despite the limitations imposed on Huawei, the Department of Commerce had previously granted licenses for the supply of chips to the company. However, these licenses were for products that were considered to be below a certain performance threshold, making them non-critical. As a result, items related to 5G communications were not licensed, while 4G products were allowed to be exported to Huawei.

In a filing, Intel stated that on May 7, 2024, the US Department of Commerce informed the company about the revocation of certain licenses for exports of consumer-related items to a customer in China. This decision is expected to impact Intel's revenue for the second quarter of 2024, keeping it within the original range but below the midpoint. However, the company remains optimistic about its full-year revenue and earnings per share growth compared to the previous year.

Similarly, Qualcomm received notification from the US Department of Commerce on the same day regarding the revocation of its license to export 4G and other integrated circuit products to Huawei. This development has led Qualcomm to adjust its expectations for product revenues from Huawei, with the revocation accelerating the timeline for the cessation of revenue from the Chinese company.

Despite facing challenges in the smartphone sector due to restrictions on leading-edge processors, Huawei seems to be making a comeback in 2024. The company has reportedly collaborated with local foundry SMIC to produce processors using a near-7nm manufacturing process. This strategic move indicates Huawei's commitment to innovation and resilience in navigating the evolving tech landscape.