Intel Corp is reviewing its global supply chain amid the growing trade spat between the US and China, chief executive officer Bob Swan said.
Intel does not believe tariffs are an “effective way to drive global trade,” Swan said on Sunday, and is encouraging the governments to engage in constructive dialogue — even as the company tries to mitigate the impact of the dispute.
“How do we move goods — sometimes our customers will move their operations — and how do we work the global supply chain so less product is coming directly from China to the US that would be subject to tariffs?” Swan said in an interview with Bloomberg TV in Tel Aviv, Israel.
Uncertainty as US-China trade negotiations enter a crucial stage is weighing on companies like Intel, as are signals from the Chinese government that it might not implement major stimulus measures — as it has done in the past — if the economy struggles.
Intel already cut its revenue forecast for the full year, citing “China headwinds.”
Meanwhile, Huawei Technologies Co’s (華為) US chip suppliers, including Qualcomm Inc and Intel, are quietly pressing the US government to ease its ban on sales to the Chinese tech giant, even as Huawei itself avoids typical government lobbying, people familiar with the situation said.
Executives from Intel and Xilinx Inc late last month attended a meeting with the US Department of Commerce to discuss a response to Huawei’s placement on the blacklist, one person said.
The ban bars US suppliers from selling to Huawei without special approval, because of what the US government said were national security issues.
Qualcomm has also pressed the department over the issue, four people said.
Chipmakers argue that Huawei units selling products, such as smartphones and computer servers, use commonly available parts and are unlikely to present the same security concerns as the Chinese technology firm’s 5G networking gear, three people said.
“This isn’t about helping Huawei. It’s about preventing harm to American companies,” one of the people said.
Out of US$70 billion that Huawei spent buying components last year, about US$11 billion went to US firms including Qualcomm, Intel and Micron Technology Inc.
Qualcomm, for example, wants to be able to continue shipping chips to Huawei for common devices like smartphones and smart watches, a person familiar with the company’s situation said.
Intel, Xilinx and Qualcomm declined to comment. Huawei did not respond to a request for comment.
Additional reporting by Reuters
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