The US has revoked Intel and Qualcomm’s licenses to sell chips to Huawei. After a postponement just two months ago, the American government is now changing course again.

Intel and Qualcomm lose their export license to sell semiconductors to the Chinese company Huawei. Bloomberg knows this. The US has a trade embargo against Huawei, but Intel and Qualcomm were allowed to continue selling processors.

Cornering

AMD did not receive such licenses and previously complained about the US’s arbitrariness. The American government initially appeared receptive to the complaint, but after talks with China to improve strained relations, the administration decided in March not to make any adjustments.

Now it is time for a new turn and the licenses will be revoked. Officially, the motive is to prevent China from using American technology to develop AI.

In practice, the strategy hinders Intel and Qualcomm’s sales to China. Huawei, in turn, is losing access to processors for its phones and laptops.

Phones and laptops

Huawei’s phones have already lost a lot of relevance for us, as they were already isolated from Google software by the existing embargo. Without the Play Store and Google apps, devices in the West are not really competitive. Qualcomm is also not a major supplier to Huawei, so the impact on the Chinese company’s smartphone business will be limited.

However, Huawei also markets laptops that run on Intel chips. With the new decision, Huawei will find it difficult to build these laptops competitively. The company said earlier this year that business was returning to normal. This setback is likely to have new implications.

Own chips

China, for its part, is trying to stand on its own two feet as much as possible. The chips produced in the country are becoming more modern every year. For example, the Chinese will build their own 7nm chip as early as 2022. The production process still relies on Western technology, such as the machines from the Dutch ASML.

The Americans also want to put an end to the operation as quickly as possible. In any case, the American embargo policy means an unprecedented boost for the Chinese chip industry.