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Editor's note: This story has been updated with Intel’s disclosure to the SEC regarding its revenue expectations for the second-quarter of 2024.
The United States has revoked the export licenses of Intel Corp (NASDAQ:INTC) and Qualcomm Inc. (NASDAQ:QCOM) to sell chips to China’s Huawei Technologies Co Ltd.
What Happened: The U.S. Commerce Department has revoked the licenses that allowed Intel and Qualcomm, among others, to export chips used in laptops and handsets to Huawei, Reuters reported citing people familiar with the matter. The licenses were reportedly withdrawn with immediate effect.
The move comes after the recent launch of Huawei’s first AI-enabled laptop, the MateBook X Pro, powered by Intel’s new Core Ultra 9 processor. This launch drew criticism from Republican lawmakers, who suggested that the Commerce Department had approved Intel to sell the chip to Huawei.
“We have revoked certain licenses for exports to Huawei,” the Commerce Department said.
The Commerce Department’s decision, which was influenced by Republican China hawks in Congress, aims to strengthen U.S. national security and limit China’s technological advancements, according to the report.
“This action will bolster U.S. national security, protect American ingenuity, and diminish Communist China's ability to advance its technology,” Rep. Elise Stefanik (R-NY) said.
The revocation of these licenses could have a significant impact on Huawei, which heavily relies on Intel chips for its laptops, as well as on U.S. suppliers doing business with the company.
In their latest disclosure with the SEC, Intel mentioned that the revoking of licenses might take a slight hit on the revenue.
“As a result, the Company expects revenue for the second quarter of 2024 to remain in the original range of $12.5 billion to $13.5 billion, but below the midpoint. For full year 2024, the Company continues to expect revenue and earnings per share to grow year-over-year compared to 2023,” the filing read.
Intel and Qualcomm did not immediately respond to Benzinga's request for comment.
Why It Matters: The U.S. has been actively implementing measures to restrict China’s access to advanced chip technology. Despite these efforts, Chinese entities have reportedly managed to acquire high-end NVIDIA Corp (NASDAQ:NVDA) chips through third-party vendors.
In March, the U.S. government announced plans to release a list of Chinese chipmaking facilities that would be prohibited from receiving crucial tools, a move that could significantly impact the global semiconductor industry.
Despite these tensions, China remains a crucial market for U.S. semiconductor firms, with companies like Intel, Qualcomm, and Broadcom Inc (NASDAQ:AVGO) reporting greater revenues from China than from the U.S..
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