US blocks Intel and Huawei from selling chips to Huawei

The US government has blocked chip makers including Qualcomm and Huawei from selling any processors to Huawei, according to Bloomberg. On the one hand that could set back Huawei’s PC, smartphone, and tablet divisions in the coming years. On the other, Huawei’s been preparing for this for years and has already begun making chips and software for its devices in-house.

While this isn’t the first time that the US has restricted chip sales to Huawei, it seems to be a dramatic tightening of restrictions. It seems to be the “total ban” we were hearing about earlier this year.

After initially banning shipments to the Chinese electronics company during the Trump administration, the US government eventually granted licenses to companies allowing them to ship some processors to Huawei.

For example, Qualcomm was blocked from sending chips with 5G networking capabilities, but in 2020 the US granted Qualcomm a license to chip 4G chips to Huawei. And Intel has had a license to chip some PC chips since 2020.

Last month Huawei introduced a new MateBook X Pro laptop powered by an Intel Core Ultra 7 155H or Core Ultra 9 185H processors based on Intel’s latest “Meteor Lake” architecture, a move that rankled some Republican in Congress. Revoking the license is allegedly part of an effort to prevent Chinese companies from leveraging advancements in emerging categories like AI (both Qualcomm and Intel are making integrated neural processing units a big selling point for their latest chips).

I can’t help but wonder though, if these restrictions will just lead to Huawei and other Chinese companies continuing to develop their own home-grown alternatives, effectively reducing China’s reliance on Western companies.

Meanwhile Intel has already lowered its revenue forecast in response to the new restrictions.