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US blocks companies from selling chips to Huawei

by on08 May 2024

Tightens restrictions

Uncle Sam's not letting Huawei get its  mitts on any semiconductors from Qualcomm and Intel and is trying to put a spanner in the works for Huawei's phone and laptop chip supply.

House Foreign Affairs Committee member Michael McCaul has said this is all about keeping the dragon from breathing fire into advanced AI tech. "It's blocking any chips sold to Huawei," he said, clarifying that Intel and Qualcomm have been getting a bit too cosy with the Chinese giant for comfort.

This might not be a massive blow to chip sales, but it's a clear sign that the US is dead set on cutting China off from a whole load of semiconductor tech. They're even considering sanctions against six other Chinese outfits they reckon might be sneaking chips into Huawei.

The Commerce Department is being coy, confirming they've pulled some licenses but keeping the juicy details under wraps. The Democrats are feeling the heat to clamp down on Huawei and other Chinese tech firms, especially since China's been showing off its semiconductor smarts.

Qualcomm shares took a wee tumble, dropping 0.9 percent to $180.15, all because of a chinwag in the Financial Times about the license snafu. Intel's shares did not budge.

Qualcomm has been claiming that its Huawei dealings are on the way out, only flogging old-school 4G chips and steering clear of the snazzy 5G stuff. "This is small," quips analyst Stacy Rasgon, saying Huawei's not even a blip on Qualcomm's radar.

Huawei's shipping a measly five million computers a year – that's just two per cent of the market. So even if Intel's been the brains behind those machines, it's hardly going to make a dent in its dosh.

The US is also having a natter with Japan, the Netherlands, South Korea, and Germany trying to get them to tighten the screws on selling chip-making gear to China, with Huawei squarely in their sights.

Republican bigwigs like McCaul, Elise Stefanik, and Marco Rubio are all over the Commerce Department to stop chip sales to Huawei. They got all hot under the collar when Huawei showed off a new smartphone with a swanky Chinese-made processor while the US Commerce Secretary was over in China.

The Biden crew's launched a probe into this 7-nanometer chip, which might be a bit of a no-no if it's using American and Dutch know-how. Despite all its bluster about going it alone, China's still relying on foreign gear to make its top-notch semiconductors, however it is pretty clear that they are getting less dependant.


Last modified on 08 May 2024
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