Today it is known that two anonymous sources revealed to Reuters that Intel was able to evade US efforts to halt the sale of its chips to Huawei, thanks to a license. As reported, this agreement has brought Intel “hundreds of millions of dollars” in revenue. Interestingly, everything is legal, as Intel possesses an exclusive license issued by the Trump administration. This enables Intel to ship processors for use in Huawei’s laptops.
It appears that the current president, Joe Biden, has not taken any action against this arrangement. There have been long-standing pressures on the president to revoke the license, specifically from Intel’s direct competitor, Advanced Micro Devices (AMD). AMD argued it was unfair that they did not receive a license to sell similar chips to Huawei and other Chinese companies. If they cannot obtain a license like Intel’s deal with Huawei, they want Intel to stop sales to the Chinese telecommunications company altogether.
Intel’s ability to hold on to a license to sell chips while one of its rivals could not secure a similar permit demonstrates the uneven and uncertain landscape businesses face when the United States tries to limit Beijing’s access to sophisticated American technology, especially a heavily sanctioned company like Huawei.
AMD is especially hurt by this as Huawei is beginning to have a growing share of the global laptop market. All these laptops use Intel processors, leaving AMD out of a market worth hundreds of millions of dollars in sales.
“Most of the CPUs used in Huawei’s laptops are still Intel, so any further restrictions on this would make it quite difficult for Huawei’s laptop offerings,” said Emma Xu, an analyst at technology market research firm Canalys.
Reuters reached out to Intel, Huawei, the Commerce Department, and the White House, but they all declined to comment. After it was discovered that AMD was behind these pressures, the company did not even respond to a request to comment on the known information.
As context, Intel has seen a significant increase in the market share of laptop CPUs for Huawei, rising from 52.9% to 90.7%. This is evident as Intel is the only Western CPU company with a license to sell to Huawei.
Huawei has become a symbol of the ongoing technological conflict between Washington and Beijing. The Chinese company was added to the list of trade restrictions by the Trump administration in 2019 on allegations of sanctions violations. Huawei has previously denied any wrongdoing. The Chinese embassy in Washington urged the United States to “stop exaggerating the concept of national security” in order to “suppress Chinese companies” and described the restrictions on Huawei as “economic intimidation.”
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