Huawei’s future in doubt as US stops licensing exports

Huawei’s future in doubt as US stops licensing exports

Business news |
By Peter Clarke

The US government has stopped approving export licenses for products to be sent to Chinese technology firm Huawei, according to reports.

The move would put extreme pressure on Huawei, which was already being denied access to leading-edge semiconductors and had been forced to adjust its business over the last couple of years.

The move could even threaten the survival of the company and, as such, would be seen as highly aggressive by China.

“China is deeply concerned. We are closely following relevant developments,” said Mao Ning, a spokesperson for the country’s foreign ministry, said Tuesday. “China firmly opposes the United States’ generalization of the concept of national security, abuse of state power, and unreasonable suppression of Chinese companies,”

However, the move is also likely to be hurt many US and other companies that have been exporters of commodity components to the Chinese firm.

Big squeeze

Huawei was the first company the US targeted with export control licensing, accusing the company of working with the People’s Liberation Army and being a threat to US national security. This was a few years ago under the Trump administration. The company and the Chinese government have repeatedly denied the allegations.

While access to leading-edge technology was denied, many products did not require export licenses and export licenses were approved for some companies including AMD, Intel and Qualcomm. These were for often chips behind the leading-edge and not related to 5G telecommunications. For example AMD and Intel have continued to supply processors for Huawei laptop computers.

However, gradually the US has increased the severity of sanctions and broadened them to include limits on supplying Chinese chip companies including logic, memory and foundries.

It has been reported that last week the US, Japan and the Netherlands agreed to tighten restrictions on the export of chipmaking equipment (see Japan, Netherlands agree to help US limit exports to China).

No rationale has been given for imposing yet stricter sanctions on Huawei, except that the economic pressure on the company has driven it closer to the Chinese government. Huawei has also been reported to be investing in projects aimed at building a US-free semiconductor supply chain (see Report: Huawei, Shenzhen support creation of local foundry).

Related links and articles:

News articles:

Japan, Netherlands agree to help US limit exports to China

US export controls’ reach extends to Chinese displays

Advanced logic, memory, YMTC come under China export controls

Report: Huawei, Shenzhen support creation of local foundry

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