According to a document seen by Reuters, the Biden administration has revoked eight permits this year that allowed U.S. companies to supply goods to Huawei, as part of the increased pressure on Chinese telecommunications equipment companies by the U.S. government.
Over the years, Huawei has faced export restrictions from the U.S. surrounding 5G and other technological products. However, some U.S. companies were granted licenses by the U.S. Department of Commerce to sell certain goods and technology to Huawei. In 2020, Qualcomm obtained a permit to sell 4G smartphone chips to Huawei.
In May, the Department of Commerce, responsible for overseeing U.S. export policy, stated that it had revoked “certain” licenses without specifying the names or quantity of affected suppliers. However, sources speaking to The Washington Post anonymously revealed that this action would prevent Intel and Qualcomm from selling chips for Huawei’s smartphones and laptops.
Due to security concerns, Huawei was added to a trade blacklist by U.S. officials in 2019, restricting most U.S. suppliers from exporting goods and technology to Huawei without obtaining permission from the Department of Commerce. U.S. officials continue to tighten controls to cut off Huawei’s ability to purchase or design semiconductor chips that power most of its products.
Huawei has consistently denied any security risks and has begun its recovery.
Last year in August, Huawei released a new phone reportedly using precision chips manufactured by China’s Semiconductor Manufacturing International Corporation (SMIC), shocking the industry.
In March, Bloomberg reported that Huawei and SMIC used U.S. technology to produce advanced chips in China in 2023. SMIC utilized technology from California-based Applied Materials Inc and Lam Research Corp to develop an advanced 7-nanometer chip for Huawei.
SMIC was blacklisted by the U.S. in 2020 for alleged ties to the Chinese military-industrial complex.
Research firm Counterpoint reported that Huawei’s new phone led to a 64% surge in smartphone sales in the first six weeks of 2024. Its smart automotive components business also contributed to Huawei’s recovery, with the company achieving its fastest revenue growth in four years in 2023.
On April 11, Huawei launched a laptop with an Intel artificial intelligence chip, raising concerns among Republican lawmakers in the U.S. Congress.
Despite restrictions, officials continued to issue licenses for specific 4G projects during the end of the Trump administration and the beginning of the Biden administration. Huawei’s suppliers received permits worth billions of dollars to sell goods and technology to Huawei.
According to a document that will be submitted to McCaul, the Department of Commerce approved Huawei permits for “sporting equipment and office furniture, as well as low-tech components for consumer goods like touchpads and touchscreen sensors for tablets,” which are widely available from both Chinese and foreign sources.
The document’s summary also stated that from 2018 to 2023, the Department of Commerce received licenses worth $880 billion seeking to supply entities on the physical list to Chinese counterparts, with $335 billion worth of licenses approved. The Department added that the permitted requests valued at $2.22 trillion were approved in Biden’s first year in office, with applications totaling $560 billion received that year.
A source previously reported to Reuters that U.S. officials are crafting a new formal policy to refuse exports of goods to Huawei, including products below the 5G level, such as 4G products, Wi-Fi 6 and 7, artificial intelligence, high-performance computing, and cloud project products.
Another source indicated that this move is expected to reflect the Biden administration’s tightening policies toward Huawei over the past year. The source suggested that permits for 4G chips below 5G technology might have been previously approved but are now being denied.