Trump admin slams Huawei, halting shipments from Intel, others

Platform News: Huawei Technologies

The Trump admin has advised Huawei suppliers, including Intel, that it is revoking licenses to sell to the China-based vendor and intends to deny dozens of other applications to provide the telecommunications firm, individuals familiar with the matter told journalists.

The activity – likely the final against Huawei Technologies under President Trump – is the latest in a long-running effort to highlight the world’s largest telecommunications equipment manufacturer, which Washington sees as a national security threat.

The notices came amid a flurry of US efforts against China in the last days of Trump’s government. Democrat Joe Biden will take the oath of office as president on Wednesday.

Commerce said it could not comment on specific licensing decisions, but said that the department continues to use different agencies to “consistently” apply licensing policies in a manner that “protects US national security and foreign policy interests.”

In an email seen by journalists at our partner news agency Reuters documenting the activities, the Semiconductor Industry Association said on Friday the Commerce Department had issued “intents to deny a significant number of license requests for exports to Huawei and a revocation of at least one previously issued license.” Sources familiar with the situation, who spoke on condition of anonymity, said that there was one revocation. One of those sources said eight licenses were yanked from four companies.

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The information triggered moderate profit-taking in certain semiconductor related stocks in Asia on Monday. Samsung Electronics dropped 1.5% while Advantest dropped 1.5% and Tokyo Electron dropped by 0.8%.

Japanese flash memory chip maker Kioxia Corp had at least one license revoked, just two of the sources stated. The company, formerly known as Toshiba Memory Corp, said it does not “disclose business details regarding specific products or customers.”

The semiconductor association’s email said the activities spanned a “broad range” of goods in the semiconductor business and asked companies whether they’d received notices.

The email noted that companies had been awaiting “many months” for licensing decisions, and less than a week left in the administration, addressing the denials was a challenge.

Firms that obtained the “intent to deny” notices have 20 days to respond, along with the Commerce Department has 45 days to notify them of any change in a decision or it becomes final. Businesses would then have another 45 days to appeal.

The US put Huawei Technologies on a Commerce Department “entity list” in May 2019, limiting providers from selling American products and technology to it.

But some sales were allowed and many others refused while the US intensified its crackdown on the business, in part by expanding US authority to demand licenses for sales of semiconductors made overseas with American technology.

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Prior to the latest action, some 150 licenses were pending for $120 billion worth of products and technology, which was held up because various US agencies couldn’t agree on whether they need to be granted, a person familiar with the matter said.

Permit applications usually seek permission for things providers are hoping to ship more than four years, typically highball the estimated worth, and do not need to be backed by purchase orders, the source and industry specialists said.

Still another $280 billion of license applications for goods and technology for Huawei nevertheless have not been processed, the source said, however, now are more likely to be denied.

Intel has received licenses from US government to keep on supplying certain products to Huawei, an Intel spokesman said last September.

An August rule said that merchandise with 5G capabilities were anticipated to be rejected, but earnings of less complex technology would be decided on a case-by-case basis.

The United States made the latest decisions through a half dozen meetings starting on Jan. 4 with senior officers in the departments of Commerce, State, Defense and Energy, the source said. The officials created detailed advice with regard to which technologies were effective at 5G, then applied that standard, the individual added.

That intended issuing denials for the great majority of the approximately 150 disputed applications, also revoking the eight permits to make these consistent with the latest denials, the source said.

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The US action came after pressure from a current Trump appointee from the Commerce Department, Corey Stewart, who wanted to push through hard-line China policies after being hired to get a two-month stint in the bureau at the end of the government.

Trump has targeted Huawei in other ways. Meng Wanzhou, Huawei’s chief financial officer, was arrested in Canada in December 2018, on a US warrant. Meng, the daughter of Huawei’s founder, as well as the firm were indicted for deceiving banks about its business in Iran.

The team at Platform Executive hope you have enjoyed this news article. Translation from English to other languages via Google Cloud Translation. Initial reporting via our official content partners at Thomson Reuters. Reporting by Karen Freifeld and Alexandra Alper. Additional reporting by David Kirton in Shenzhen and Hideyuki Sano in Tokyo. Editing by Chris Sanders, Jonathan Oatis and Lincoln Feast.

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