Huawei has struggled for years with limited access to U.S. chips and technology, and the Trump and Biden administrations have banned public exports to the company. Huawei has not seen any U.S. chips, but all sales had to be approved by the government, and the restrictions have been revised several times since the initial ban in 2019. Reuters, the Financial Times and several other outlets have reported that the US administration’s Biden is pushing for tougher restrictions on Huawei, and the FT says the US is seeking a “complete ban” on sales to the Chinese tech company.
Like any technology company, Huawei buys components from a number of different suppliers to build its network equipment and smartphones. While a lot of manufacturing is done in China, there aren’t many options for CPUs, and US companies Qualcomm and Intel have kept Huawei afloat with limited export licenses from the government. Intel’s chips mean the company can still make servers, and while exports of 5G technology have been banned, Qualcomm has gone out of its way to produce special, 4G-only versions of its latest SoCs.
As the U.S. tried to strike a balance that hurt Huawei without hurting American suppliers that have Huawei as customers, it decided not to sell just the latest technology. The cut-off point for this name was always the nebulous “5G”, but now even that is closing. “US authorities are creating a new formal denial policy for shipments to Huawei that include items below the 5G level, including 4G items, Wifi 6 and 7, artificial intelligence, and high-performance computing and items,” Reuters said. It becomes cloudy. It appears to ban all sales from Intel and Qualcomm.
Tech companies are not happy about losing customers. The Information Technology and Innovation Foundation, a Washington, D.C. think tank that counts Qualcomm, Intel and many other big tech companies among its supporters, said in a press release: “The administration’s continued efforts to strengthen US technology competitiveness have been laudable, but Cutting Huawei’s ties to US suppliers entirely would likely backfire.” The report continued: “China remains a critical market for US technology vendors, accounting for 36% of US semiconductor sales through 2019. Exports to Huawei help Chinese technology suppliers and hurt their American counterparts.
The failure to grant new export licenses does not immediately cut Huawei off. The US will just stop giving the new licenses, so if it doesn’t cancel the existing licenses (it can!), Huawei will have the parts for a few more months until the existing licenses expire. The Financial Times quoted “an executive at a semiconductor design company that has worked with Huawei” as saying that the real change will come when the existing licenses expire, but “since there are no details on what licenses and when they will be granted.” “It’s not publicly released, it makes it difficult to predict.”