U.S. Further Tightens U.S. Chip Sales to Huawei

The Commerce Department has further restricted the sale of U.S. technology to China’s Huawei Technologies, revoking certain permissions of U.S. chip sales amid renewed scrutiny of the company in Washington. “We are not commenting on any specific licenses, but we can confirm that we have revoked certain licenses for exports to Huawei,” the Commerce Department said in a statement.

The move will curb U.S. companies Intel and Qualcomm from selling chips to Huawei for its smartphones and laptops, according to three sources who spoke to The Washington Post on the condition of anonymity. 

Beacon Global Strategies SVP Meghan Harris said recent announcements about new Huawei products using U.S. technology were probably the “straw that broke the camel’s back” to prompt the new curbs.

The new export restrictions, first reported by the Financial Times, come as Huawei faces renewed pressure at other federal agencies like the FCC and a push by the Biden Administration to boost American companies that can compete against Huawei. The FCC plans to vote this month on a proposal that would bar Huawei from certifying wireless equipment for the U.S. market.

Washington’s export controls against Huawei began under the Trump Administration, which imposed broad sanctions that forced the company to divest parts of its business to survive and turn to domestically produced chips for advanced functions. However, U.S. companies were allowed to continue selling to Huawei some products deemed less sensitive.

These allowances have drawn criticism from lawmakers who see them as loopholes, according to The Washington Post. Sen. Marco Rubio (R-FL) and Rep. Elise Stefanik (R-NY) recently wrote to Commerce Secretary Gina Raimondo urging the department’s Bureau of Industry and Security to stop Intel (NASDAQ: INTC) and Qualcomm (NASDAQ: QCOM) from selling chips for Huawei’s smartphone and personal-computer businesses.

Rubio praised the new restrictions as “the right decision” but added that “the license never should have been granted in the first place.”

Intel declined to comment. Qualcomm did not immediately respond to a request for comment.

Huawei supplies internet and phone networks in virtually every country, including rural areas of the United States. U.S. officials fear Huawei’s network gear may be more susceptible to infiltration by Chinese intelligence agencies than Western vendors’ products. Huawei has denied it helps the Chinese government spy.

By Leslie Stimson, Inside Towers Washington Bureau Chief

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