Intel, Qualcomm and Xilinx join Google in cutting supply to Huawei

Move follows Trump administration's Executive Order last week and comes after Google withdrew Huawei's Android licence

Chip suppliers Intel, Qualcomm and Xilinx have ordered staff to stop supplying Huawei with immediate effect - while Infineon has denied claims that it, too, has joined them.

It follows on from a Trump administration Executive Order signed on Friday last week, and the addition at the same time of Huawei to the US ‘Entity List' of foreign companies. US companies must first apply for and acquire a licence before supplying these foreign companies.

On Sunday, it was reported that Google had withdrawn Huawei's Android operating system licence, removing access to the Google Play store and other services on all new Huawei smartphones - existing users should be unaffected.

However, the withdrawal of supplies by Intel, Xilinx, Qualcomm, and others is a more serious matter, with the companies supplying key components to Huawei for its communications hardware products.

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Xilinx supplies field-programmable gate arrays that are widely used in networking equipment. Infineon, meanwhile, supplies a range of components used by Huawei in its wired and wireless communications systems, including microcontrollers and power management integrated circuits, according to newswire Nikkei.

While based in Germany, Infineon also sources its own supplies and components from US companies and is, hence, subject to the same US export regulations. However, it today denied claims that it has suspended sales to Huawei.

Newswire Bloomberg claims that Huawei has prepared for a possible hiatus in supplies by stockpiling around three months of key components. Its main Chinese rival, ZTE, had to stop its production lines within a month when it was subject to a US embargo last year following its admission that it had broken US sanctions on Iran. It followed this up by failing to comply with a subsequent settlement with the US government.

The move will also have a significant impact on Huawei's suppliers. US companies supply around $11 billion of high-tech components to Huawei every year, and the loss of this custom will almost certainly have an effect on the revenues of Intel, Qualcomm and other companies.

The cessation of supplies to Huawei comes as the European Chamber of Commerce claims that technology transfers demanded as the price for doing business in China have increased under China's President-for-life Xi Jinping.

According to the organisation, 20 per cent of members felt compelled to transfer technology to China over the past two years, compared to 10 per cent of those polled two years ago. One-third of that 20 per cent claimed that they had experienced a forced technology transfer.

China's Peoples Daily newspaper - a mouthpiece of the government - countered that such claims were "purely fabricated". The survey also indicated that it had become more difficult for foreign companies to do business in China.

Updated Monday 20 May at 12:56 to include denial by Infineon that it has also suspended sales to Huawei, made earlier today by the Nikkei newswire.

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