Intel receives US Commerce Department approval to sell select products to Huawei

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Intel Corp. has secured a license from the U.S. Department of Commerce to sell select products to Huawei, reports Reuters. The government organization barred firms from providing the Chinese telecom with specific American technology without its approval on September 15.

At present, Intel is the first and only company to have received an exemption to the Commerce Department’s new regulations.

What is Intel Going to Sell Huawei?

The Reuters article on Intel’s trade license does not specify what kind of technology the firm is authorized to sell to Huawei. However, based on the Santa Clara, California-based chipmaker’s current portfolio, it is possible to make some educated guesses.

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For example, the integrated circuit (IC) company sold its smartphone assets to Apple for $1 billion in July 2019. In addition, the corporation typically offers its customers microchips, software, and instruction sets, but not semiconductor manufacturing equipment. Therefore, Intel will not be selling Huawei the technology it needs to power its best-selling premium handsets.

That said, Intel’s new license might allow it to sell wireless networking gear to its old client.

Before the Commerce Department issued its latest sanctions, the company sold Huawei components for its 5G mobile base stations. The Sino firm started designing its base station chipsets in-house after the U.S. government blocked its access to certain American technologies in May 2019.

Many of the Chinese conglomerate’s semiconductor suppliers, including its handset chip manufacturer Taiwanese Semiconductor Manufacturing Corporation (TSMC), ended their relationship with the company last week to avoid violating Washington’s latest trade rules.

Accordingly, Huawei might have resumed its old relationship with Intel to keep its most important business segments going.

What About the Old Chipmakers That Requested Trade Licenses?

Since its new export controls went into effect, the Commerce Department has received trade license requests from Qualcomm, MediaTek, Samsung, SK Hynix, and the Semiconductor Manufacturing International Corporation (SMIC).

As of this writing, the government agency has not granted any of their requests.

According to Reuters, an industry insider said non-American chipmakers do not “have a high chance” of receiving trade ban exemptions. Washington does not have authority over foreign manufacturers. But it can sanction companies that subvert its mandate against selling specific U.S. semiconductor technology to firms like Huawei.

So, Intel’s new trade license is undeniably good news for the Chinese conglomerate. Huawei can generate billions of dollars in revenue by landing new 5G base station contracts. However, its hope of reestablishing supply deals with its former smartphone component vendors seems dimmer than ever.

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