The US started to further tighten the screws on China’s Huawei and has cancelled several licenses that allowed certain companies to deal with them in a limited capacity
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The US has cancelled permits that allowed Huawei Technologies Co. to purchase semiconductors from Qualcomm Inc. and Intel Corp., tightening restrictions on the Chinese tech giant.
Although the impact on chip sales may not be significant, it highlights the US government’s commitment to limiting China’s access to semiconductor technology. Additionally, officials are considering sanctions against six Chinese companies suspected of supplying chips to Huawei, which has faced US trade restrictions since 2019.
House Foreign Affairs Committee Chairman Michael McCaul underscored the strategic importance of this decision, highlighting its role in hindering China’s progress in artificial intelligence.
While the immediate impact on chip sales may not be substantial, the decision serves as a stark reminder of the US government’s commitment to constraining China’s access to semiconductor technology. In addition to revoking licenses, US officials are actively considering imposing sanctions on six Chinese companies suspected of supplying chips to Huawei.
This move reflects the broader strategy of the US to exert pressure on Chinese tech companies, particularly those like Huawei, which have been subject to US trade restrictions since 2019.
The US Commerce Department has confirmed the withdrawal of “certain licenses” for exports to Huawei, but specific details regarding the extent of these restrictions have not been disclosed. The Biden administration, facing mounting pressure to take a tougher stance on Huawei and other Chinese tech firms, continues to evaluate measures to safeguard national security and foreign policy interests.
Qualcomm, a key supplier of chips to Huawei, has already indicated that its business with the Chinese company is dwindling, and is now primarily limited to providing older-generation 4G network chips rather than advanced 5G technology. Soon, it may completely their business may be wiped out.
Similarly, Intel, another major player in the semiconductor industry, has seen minimal impact on its revenue from Huawei, as the Chinese company represents a small fraction of its customer base.
Despite these limitations, the US continues to urge its allies, namely Japan, the Netherlands, South Korea, and Germany, to further tighten control on the sale and maintenance of chip manufacturing tools, with Huawei as the primary target of these efforts. This coordinated approach seeks further to restrict Huawei’s access to critical semiconductor technologies, thereby diminishing its influence in global markets.
Republican lawmakers, led by figures like McCaul, Elise Stefanik, and Marco Rubio, have been vocal in their calls for stricter measures against Huawei. The unveiling of a smartphone powered by a Chinese-made processor during a visit by Commerce Secretary Gina Raimondo to China in August further fueled concerns about the potential violations of US law.
In response to these concerns, the Biden administration has initiated an investigation into the origin of the “purported” 7-nanometer chip used in the Huawei smartphone. If it is found that the chip was supplied by Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC), it could constitute a violation of US law. This incident underscores the challenges of enforcing restrictions on semiconductor technology, particularly when global supply chains are intricately intertwined.
Despite China’s efforts to develop a domestic semiconductor supply chain, it remains reliant on foreign technology, as evidenced by the use of Dutch and American tools in manufacturing advanced chips. This reliance highlights the complexities of efforts to restrict China’s access to semiconductor technology and underscores the need for continued vigilance in safeguarding critical technologies vital to national security and economic competitiveness.
