Intel issues revenue warning after US revokes Huawei export licenses — further efforts to restrict China's access to AI chips

Huawei
(Image credit: Huawei)

The U.S. government has withdrawn select export licenses from Intel and Qualcomm, effectively preventing them from supplying processors to Huawei — the latest volley in an ongoing chip war between the U.S. and China.

Intel and Qualcomm can no longer sell processors for laptops and smartphones to Huawei, according to a report from the Financial Times. The new ruling hits their businesses and leaves the Chinese tech giant — which has been on the U.S. trade restrictions list since 2019 — without some of the crucial elements needed for its products.

"We continuously assess how our controls can best protect our national security and foreign policy interests, taking into consideration a constantly changing threat environment and technological landscape," a spokesperson for the U.S. Department of Commerce told the FT. "As part of this process, as we have done in the past, we sometimes revoke export licenses." 

The spokesperson declined to comment on specific export licenses and did not name the companies that owned the licenses, but the unofficial information suggests that the authorizations have been withdrawn from Intel and Qualcomm. 

Although the U.S. government does not allow American companies to ship high-performance processors to Chinese entities, both Huawei and Inspur, two prominent Chinese server-makers, could buy Intel's Xeon processors for servers — albeit, not always under their own brands. The U.S. government even provided Intel with an export license to sell its Core Ultra 'Meteor Lake' CPUs for laptops to the blacklisted Huawei, which annoyed some U.S. lawmakers

As a result of the Huawei export license revocation, Intel now expects its second quarter revenue to fall below the midpoint of its guidance ($12.5 billion to $13.5 billion) issued a couple of weeks back, according to a report from Bloomberg

Republican lawmakers have recently intensified the call for President Biden to impose stricter measures against Huawei, citing the company's alleged role in aiding Beijing’s global cyber espionage (a claim Huawei denies). Revoking these licenses is an affirmation of the U.S. government's firm stance against potential Chinese threats.

Although the decision might not impact a large quantity of chip supplies for Intel and Huawei, it highlights the U.S. government's general intention to limit China's access to a wide range of advanced processors. Officials are also contemplating sanctions against six Chinese companies suspected of potentially supplying chips to Huawei, Bloomberg claims.

Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

TOPICS
  • defunctup
    I am so blessed and honored to have the US government and military save us patriots from the Chinese communist party businesses enabling some mid-level sales manager using a $700 Intel powered notebook to finish a spreadsheet. DEMOCRACY SAVED, TYRANNY AVERTED GOBLESSTHEUSA 🇺🇸🦅
    Reply
  • NinoPino
    Maybe Intel is facing his worst moment in history. They are facing all of this :
    - losses on fab division
    - AMD soon will release Zen5
    - overclockgate just exploded for his best CPUs
    - continue to loose market share on datacenters
    - delayed battlemage and successors and rumors of cancellation for discrete graphics cards
    - his best process node not on par with competitors
    - problems with funds for the new factory in Germany
    - and now this
    Reply
  • ThomasKinsley
    NinoPino said:
    Maybe Intel is facing his worst moment in history. They are facing all of this :
    - losses on fab division
    - AMD soon will release Zen5
    - overclockgate just exploded for his best CPUs
    - continue to loose market share on datacenters
    - delayed battlemage and successors and rumors of cancellation for discrete graphics cards
    - his best process node not on par with competitors
    - problems with funds for the new factory in Germany
    - and now this
    All of this is true, but Intel is getting billions from official sources and they recently acquired ASML's HighNA machinery. I anticipate a good Intel run starting later next year.
    Reply
  • FoxtrotMichael-1
    defunctup said:
    I am so blessed and honored to have the US government and military save us patriots from the Chinese communist party businesses enabling some mid-level sales manager using a $700 Intel powered notebook to finish a spreadsheet. DEMOCRACY SAVED, TYRANNY AVERTED GOBLESSTHEUSA 🇺🇸🦅
    I get the sentiment but Huawei is not just a supplier of the CCP but is known to be almost entirely controlled by the PLA. Huawei is essentially a commercial arm of the Chinese military. Things work very different in China than they do in the west.
    Reply
  • NinoPino
    FoxtrotMichael-1 said:
    I get the sentiment but Huawei is not just a supplier of the CCP but is known to be almost entirely controlled by the PLA. Huawei is essentially a commercial arm of the Chinese military. Things work very different in China than they do in the west.
    And before the bans was also the biggest smartphone manufacturer in the world and the 5G equipment leader.
    Reply
  • Li Ken-un
    The U.S. government even provided Intel with an export license to sell its Core Ultra 'Meteor Lake' CPUs for laptops to the blacklisted Huawei, which annoyed some U.S. lawmakers.
    Meteor Lake CPUs don’t even meet Intel’s own definition of what an AI PC should be capable of. What’s the concern?
    Reply
  • FoxtrotMichael-1
    Li Ken-un said:
    Meteor Lake CPUs don’t even meet Intel’s own definition of what an AI PC should be capable of. What’s the concern?
    We're not allowed to talk politics on Tom's Hardware, but the United States is increasingly taking a position of military separation from China. As I pointed out above, Huawei is known to be a commercial entity of the PLA, therefor the United States doesn't want them to be using any American chips.
    Reply
  • Li Ken-un
    FoxtrotMichael-1 said:
    Huawei is known to be a commercial entity of the PLA, therefor the United States doesn't want them to be using any American chips.
    I don’t know if that kind of policy hurts us more than it hurts them. The rewards are few and the risks are high.

    FoxtrotMichael-1 said:
    We're not allowed to talk politics on Tom's Hardware
    There are certainly more politics-friendly forums on other news sites you can poke around. And they’ll have readily available counterpoints that I won’t bother to repeat here. (Steer clear of the one beginning with the letter W; 😉 their comment threads are political without the intellectual.)
    Reply
  • shawman123
    NinoPino said:
    Maybe Intel is facing his worst moment in history. They are facing all of this :
    - losses on fab division
    - AMD soon will release Zen5
    - overclockgate just exploded for his best CPUs
    - continue to loose market share on datacenters
    - delayed battlemage and successors and rumors of cancellation for discrete graphics cards
    - his best process node not on par with competitors
    - problems with funds for the new factory in Germany
    - and now this
    Intel's problem is execution. News around Raptor Lake Refresh issues are irrelevant as desktop sales dont matter that much. Intel's issue is in DC. They are behind the 8th ball with ARM servers taking over DC and Nvidia being near monopoly in DC GPU which is taking most of cloud spend at this point.
    Reply
  • NinoPino
    shawman123 said:
    Intel's problem is execution. News around Raptor Lake Refresh issues are irrelevant as desktop sales dont matter that much.
    True for financial but however a little brick in the wall and most importantly the desktop dominance in 80s 90s was what permitted to gain traction in datacenters once dominated by proprietary solutions. Desktop PCs and workstations are not only a market, but nowadays are also the way to show technical dominance.
    shawman123 said:
    Intel's issue is in DC. They are behind the 8th ball with ARM servers taking over DC and Nvidia being near monopoly in DC GPU which is taking most of cloud spend at this point.
    Agree, sorry, I forgot to list also the ARM problem. 😀

    Bad times.
    Reply