Intel Corp Faces Setback as U.S. Revokes Licenses to Supply Chips to Huawei

Key Points

• Intel Corp (INTC) and Qualcomm's licenses to supply chips to Huawei have been revoked by the U.S. government, impacting their business and stock prices.
• The decision is part of broader U.S. efforts to limit China's access to advanced semiconductor technology due to national security concerns.
• The revocation could reshape global tech alliances and supply chains, with U.S. chipmakers needing to adapt to the changing geopolitical and economic landscape.

In this news

In a significant move that escalates the ongoing technological cold war between the U.S. and China, the Biden administration has recently revoked the licenses of Intel Corp (INTC) and Qualcomm Inc. to supply semiconductors to Chinese tech giant Huawei. This decision, part of a broader strategy to curb China's technological advancements, specifically targets the sales of chips used in Huawei's phones and laptops. The revocation is a response to concerns over national security and Huawei's alleged cyber espionage activities, which have been a point of contention among U.S. lawmakers.

The impact of this decision was immediately felt in the stock market, with shares of Intel Corp (INTC) and Qualcomm experiencing a decline. The broader semiconductor market also saw a slight retreat, indicating the significant influence of Huawei as a customer in the tech industry. This development not only affects the direct business relations between U.S. chipmakers and Huawei but also raises questions about the future landscape of global semiconductor supply chains. Other U.S. chipmakers like Broadcom, Micron, and AMD, listed as suppliers to Huawei, might face similar restrictions, affecting their business operations and revenue streams.

Looking ahead, the revocation of these licenses could lead to a reshaping of global tech alliances and supply chains. U.S. chipmakers may need to seek new markets or enhance their domestic capabilities to mitigate the loss of a major customer like Huawei. Additionally, this situation underscores the ongoing geopolitical tensions that are increasingly influencing the global tech industry, potentially leading to further decoupling of U.S. and Chinese tech sectors. The investigation into Chinese chipmaker SMIC and its compliance with U.S. laws further highlights the complexities of international tech trade and the critical role of policy in shaping the future of global technology exchanges.