Intel and Qualcomm Face Export Restrictions as China Objects
Intel and Qualcomm face export restrictions to China as the U.S. revokes some of their licenses. The licenses revoked include those allowing the shipment of chips to Huawei Technologies.Intel's shares dropped by 2.9% following the announcement.
The move comes after the United States revoked some of their export licenses, citing national security concerns.
In a filing with the Securities and Exchange Commission, Intel revealed that its sales would be impacted by the cancellation of licenses for a Chinese customer. While the name of the customer was not disclosed, it was reported that the licenses revoked included those allowing the shipment of chips used in laptops and handsets to Huawei Technologies, a sanctioned Chinese telecoms equipment maker.
The release of Huawei's AI-enabled laptop, the MateBook X Pro, powered by Intel's new Core Ultra 9 processor, drew criticism from Republican lawmakers who questioned the Commerce Department's approval of the chip sale to Huawei.
As a result of the export restrictions, Intel's shares dropped by 2.9% to $29.80. The company expects its second-quarter revenue to remain in the range of $12.5 billion to $13.5 billion, but below the midpoint. Intel shares have experienced a decline of nearly 38% this year.
Qualcomm also confirmed that one of its export licenses for Huawei had been revoked, although its shares remained flat.
Commerce Secretary Gina Raimondo emphasised the perceived threat posed by Huawei, stating that the move to revoke licenses was not a change in policy. She explained that if a previously licensed chip was found to have AI capabilities, the license would be revoked.
The Chinese foreign ministry criticised the U.S.'s actions, accusing them of over-stretching the concept of national security and abusing export controls to suppress Chinese companies without justification.
The United States placed Huawei on a trade restriction list in 2019, citing concerns of potential spying on Americans. This move is part of a broader effort to limit China's access to sensitive technology and hinder its military capabilities. Companies supplying Huawei are now required to obtain a special license before shipping.
These new restrictions on Huawei are President Joe Biden's latest attempt to deny China access to the United States' most advanced technology. Biden has employed export bans, diplomatic efforts with like-minded democracies, and other measures to impede China's technological advancements in various fields.
Intel and Qualcomm face export restrictions to China as the U.S. revokes some of their licenses.
The licenses revoked include those allowing the shipment of chips to Huawei Technologies.
Intel's shares dropped by 2.9% following the announcement.
Source: REUTERS