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  • Writer's pictureRealFacts Editorial Team

U.S. Commerce Department Restricts Chip Exports to China

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Chip companies such as Intel and Qualcomm began to struggle this week as the U.S. revoked their licenses to sell chips to Chinese phone and PC maker Huawei. “The Commerce Department has revoked certain export licenses for Huawei in our industry, including one of our licenses, we will continue to comply with all applicable export control regulations,” Qualcomm said.  The U.S. commerce department didn’t give much in terms of reasons for this, what they did say was  “We continuously assess how our controls can best protect our national security and foreign policy interests, taking into consideration a constantly changing threat environment and technological landscape, as part of this process, as we have done in the past, we sometimes revoke export licenses.” 

In terms of how the loss of these licenses will affect the companies, Angela Palumbo of Barron’s wrote, “Bernstein analyst Stacy Rasgon said in a research note Wednesday morning that Qualcomm had previously said that Huawei had already become a minor contributor to revenue, likely not more than a few hundred million dollars annually. He estimates the impact of the issue on Qualcomm’s earnings to be about 15 cent a share, a minor hit for a company expected to earn more than $11 a share in fiscal 2025. Rasgon estimated Intel’s exposure at between $500 million and $1 billion in revenue on an annualized basis, or about five to 10 cents a share in earnings. “Overall we conclude that the first-order impact of further Huawei sanctions seems manageable,” he wrote. Rasgon repeated an Outperform rating on Qualcomm and his Market Perform stance on Intel.”

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