US commerce department yanks back Huawei export licenses

Updated The US Commerce Department has revoked some of the licenses held by tech companies to supply Chinese megacorp Huawei.

Statements from the department made just hours before this piece was published confirm it stripped away previously granted licenses to export gear to Huawei, but Commerce spokespeople declined to comment on specifics, including names of suppliers.

The move is reported to affect semiconductor sales from Qualcomm and Intel after Intel's new Core Ultra 9 processor was found in Huawei's MateBook X Pro.

It has been noted, though, that Huawei is not a top customer for either company.

Still, the revelation that an Intel chip could be found in a Huawei PC provoked some Republican members of the US Congress. Among those who have advocated for the revoking of licenses to supply Huawei are House Foreign Affairs Committee chairman Michael McCaul, House Republican Conference chairwoman Elise Stefanik (R-NY), and Senator Marco Rubio (R-FL).

"This was the right decision, but the license never should have been granted in the first place," tweet/X'd Rubio on Tuesday.

Meanwhile, Stefanik went as far as to characterize Huawei as a "Communist Chinese spy company." The company has always dismissed such suggestions, and claimed no backdoors are built into its tech.

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Huawei was placed on the US Department of Commerce entity list in 2019 on the grounds of security concerns, meaning licenses are needed to access some US-built tech.

Billions of dollars worth of licenses have been issued to Huawei, and companies in similar situations, like Semiconductor Manufacturing International Corp (SMIC).

Intel has carried a license to ship laptop central processors to Huawei since 2020, while Qualcomm received a license for selling older 4G chips to handsets the same year.

Despite the licenses providing it with some supplies, Huawei has been significantly affected. The company had to terminate some trade agreements, including one with German optics giant Leica. It also sold off both its server hardware company xFusion Digital Technologies and its Honor smartphone brand.

By Q1 2023, profits were nearly half compared to compared to year-end statistics, and year-on-year sales for the quarter were largely stagnant.

However, by Q1 2024, Huawei seemed to have found a way to soar, perhaps a little too close to the Sun and US Congress attention, as it posted a net profit increase of 564 percent year-on-year.

Intel declined to comment.

The Register also asked Qualcomm and Huawei about the reports and will update with any responses. ®

Updated at 1257 UTC on May 8, 2024, to add

Intel confirmed in an SEC filing that the US Department of Commerce is "revoking certain licenses for exports of consumer-related items to a customer in China, effective immediately.

"As a result, the company expects revenue for the second quarter of 2024 to remain in the original range of $12.5 billion to $13.5 billion, but below the midpoint. For full year 2024, the company continues to expect revenue and earnings per share to grow year-over-year compared to 2023."

Updated at 1845 UTC on May 8, 2024, to add

Qualcomm has been in touch to confirm the news, telling us: "The Commerce Department has revoked certain export licenses for Huawei in our industry, including one of our licenses. We will continue to comply with all applicable export control regulations."

Updated at 12.37 UTC on May 9, 2024, to add:

Qualcomm has now issued a statement on the move by the Department of Commerce.

"On May 7, 2024, the U.S. Department of Commerce informed QUALCOMM Incorporated that it was revoking the Company’s license to export 4G and certain other integrated circuit products, including Wi-Fi products, to Huawei Device Co., Ltd. and its affiliates and subsidiaries, effective immediately.

It added: "we did not expect to receive product revenues from Huawei beyond the current calendar year... This revocation has moved that date to May 7, 2024, as we implemented measures to immediately comply. Despite the revocation, we are not changing our financial guidance for the third quarter of fiscal year 2024 previously provided in our earnings release issued on May 1, 2024."