In a significant escalation of tensions with China, the United States has revoked licenses that previously allowed U.S. companies to sell chips and other semiconductor components to Chinese telecom giant Huawei Technologies.
The move, confirmed by multiple sources briefed on the matter, represents the latest broadside by the Biden administration against Huawei, which U.S. officials view as a potential national security threat due to the company’s close ties with the Chinese government.
The revocations delivered a major blow to Huawei’s ability to acquire vital components for its smartphones and telecommunications equipment from U.S. suppliers. It also closes off potential loopholes Huawei may have sought to bypass earlier U.S. export control rules aimed at cutting off the company’s access to advanced semiconductors.
Some U.S. companies had received licenses to continue shipping components like chips produced using U.S. tools to Huawei after the company was added to the U.S. Commerce Department’s trade blacklist in 2019. That blacklisting restricted Huawei’s ability to do business with U.S. companies.
Sources said officials issued notices revoking those licenses in recent weeks, effectively banning suppliers from selling authorized chips and other items to Huawei after a set period intended to allow them to wind down licensing activity.
The licensing revocations are among the first significant policy moves targeting Huawei under President Biden. The Trump administration had aggressively cracked down on the company, citing concerns that its telecommunications networking equipment could be used for espionage by Beijing. Huawei has repeatedly denied those allegations.
Chinese officials quickly condemned the move, accusing the U.S. of abusing export control measures to intentionally undermine the legitimate operations of Huawei and other Chinese technology companies. They warned the actions could trigger retaliatory measures.
“The U.S. will pay an inseparable price for its ill-intentioned move to abuse export controls on chips,” said China’s Ministry of Foreign Affairs, urging the U.S. to restore Huawei’s licenses.
Guo Ping, Huawei’s rotating chairman, said the company protested the licensing revocations, arguing that they lacked justifiable grounds and threatened to disrupt already strained supply chains for semiconductors worldwide. “This new move runs counter to the U.S. executive order to protect national security,” Guo said.
But U.S. officials accuse Huawei of repeatedly trying to obtain restricted U.S. components in violation of export controls, justifying the license revocations. “Huawei has continuously tried to evade” U.S. export controls, said one administration official.
The revocations mark an even more aggressive stance by the U.S. against Huawei’s ability to procure critical components produced with American tools or designs. Previous rules already prohibited shipments of U.S. semiconductors to Huawei and required foreign companies using U.S. chipmaking equipment to first obtain a license before supplying Huawei.
This expanded crackdown could ultimately force Huawei and other Chinese firms to turn to alternative suppliers not bound by U.S. export controls. However, doing so could prove hugely challenging given the U.S. dominance in advanced semiconductor manufacturing capabilities.
Industry experts warn the dispute risks exacerbating already strained semiconductor supplies worldwide. “If this continues to escalate, it will create even more widespread shortages and raise prices globally,” said one semiconductor analyst.
