Intel (NASDAQ:INTC) has successfully survived efforts to block its sales of chips, worth hundreds of millions of dollars, to Huawei, Reuters reported Tuesday.
The move allows Intel, one of the world's leading chipmakers, to continue its business with the Chinese telecommunications giant, which faces significant sanctions.
The Biden administration has faced calls to withdraw a license granted by its predecessor, allowing Intel to supply Huawei with advanced processors for laptops, the report says.
This controversy has been fueled by competition from Advanced Micro Devices (NASDAQ:AMD), which has not been granted a similar license to sell its chips to Huawei. Additionally, there has been pressure from those advocating for a tougher stance on China, aiming to halt all technological sales to the sanctioned Chinese entity.
Intel's retention of this license, in contrast to AMD's inability to secure one, highlights the complex and unpredictable challenges companies encounter as the U.S. government aims to restrict China's access to advanced U.S. technology.
Furthermore, Intel's continued sales to Huawei have enabled the Chinese company to maintain and even expand its presence in the global laptop market. Meanwhile, AMD has lost the opportunity to make significant sales to Huawei, impacting its financial performance and market position, data showed.
"The majority of the CPUs used in Huawei's laptops is still from Intel, so any further limitation on it would make Huawei's laptop offering quite challenging," said analysts with technology market research firm Canalys.
According to Reuters, the reasons behind Intel receiving its license while AMD did not remain unclear.
Nonetheless, the effects on the sales of CPU chips to Huawei were significant. An internal AMD presentation, which cited data from NPD and GfK, demonstrated that the proportion of Huawei laptops equipped with AMD chips drastically fell from 47.1% in 2020 to just 9.3% in the first half of 2023.
In contrast, Intel's share in Huawei laptops surged from 52.9% to 90.7% during the same period. This dramatic shift resulted in a substantial "estimated revenue discrepancy" between the two companies, surpassing $512 million by early 2023, as reported in the AMD presentation.