Chip war: U.S. halts granting export licenses for China’s Huawei.

According to three persons with knowledge of the situation, the Biden administration has ceased accepting permits for US businesses to sell the majority of their goods to China’s Huawei.

Although the US Department of Commerce has authorized select American companies to sell Huawei-specific products and technologies, Huawei has long been subject to US export restrictions about products for 5G and other technologies. In 2020, Qualcomm was given a license to provide Huawei with 4G smartphone chips.

Officials at the Commerce Department “continually examine our policies and regulations,” according to a spokesperson, but they declined to comment on specific company discussions. Both Qualcomm and Huawei declined to comment. Earlier reports on the change came from Bloomberg and the Financial Times.

According to a source with knowledge of the situation, US officials are developing a new formal policy of denial for shipping goods to Huawei that would cover goods that fall below the 5G standard, such as 4G goods, Wi-Fi 6 and 7 items, artificial intelligence, high-performance computing, and cloud goods.

Another insider stated that the action was anticipated to reflect the Biden administration’s recent tightening of policies on Huawei. The insider claimed that licenses for 4G chips that couldn’t be utilized for 5G, which may have been issued earlier, were being rejected. It was nevertheless common for officials to give permits for products specifically for 4G applications until the end of the Trump administration and early in the Biden administration.

When Huawei was added to a trade blacklist by American officials in 2019, the majority of US suppliers were prohibited from sending products and technology to the corporation unless they had permits. Officials kept tightening the restrictions to prevent Huawei from purchasing or designing the semiconductor chips that power the majority of its products.

However, US authorities issued Huawei with permissions that permitted it to purchase some goods. For instance, vendors that wish to sell to Huawei have been granted licenses worth $61 billion (or nearly Rs. 5 lakh crore) for the period of April through November 2021.

Huawei reported its total revenue in December to be about $91.53 billion (about Rs. 7.5 lakh crore), a small decrease from 2021 when US sanctions drove its sales to drop by almost a third.