Huawei and Qualcomm sign multi-year 5G and AI patent cross-licensing deal
In short
Huawei and Qualcomm announced a multi-year patent cross-licensing agreement covering 5G, computing, artificial intelligence and networking, under which Qualcomm will also buy some of Huawei's US patents. Neither company disclosed the contract value, the number of patents or the payment structure, and Qualcomm denied reports that it is the net payer and that the deal covers Huawei's "logic folding" chip technology. Huawei said the agreement's total value could exceed $6.9 billion, a level that would bring it under US Federal Trade Commission review.
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Huawei and Qualcomm announced a multi-year patent cross-licensing agreement covering 5G, computing, artificial intelligence and networking, according to the companies. Under the deal, Qualcomm will also buy some of Huawei's US patents related to computing, AI and networking. Hankook Ilbo reported that the two companies issued a joint statement on October 5 local time, and Qualcomm confirmed that it is buying some of Huawei's non-cellular communications US patents. [ 3 , 4 , 5 ]
Neither company disclosed the contract value, the number of patents covered or the payment structure, which the Chinese outlet Meiri Jingji Xinwen said led to speculation in the market. Huawei said the total value of the agreement could exceed $6.9 billion and that a deal of that size would be subject to review by the US Federal Trade Commission. Hankook Ilbo reported that the transaction will be completed after the required regulatory approvals. [ 3 , 4 , 5 ]
The direction of royalty payments is disputed. Nikkei Asia reported that Qualcomm would for the first time become a net payer to Huawei, 25 years after Huawei began paying Qualcomm for intellectual property, and Chosun Ilbo reported that the amount Qualcomm pays Huawei is expected to exceed what Huawei pays Qualcomm. Qualcomm told Meiri Jingji Xinwen that reports calling it the net payer are inaccurate and that the specific terms are confidential, while confirming the purchase of some Huawei US patents. [ 3 , 4 , 5 , 6 ]
Whether Huawei's logic folding chip technology is part of the deal is also disputed. Bloomberg reported that the licensing agreement includes the technology, with Hankook Ilbo saying Bloomberg cited a Huawei spokesperson, and Seoul Economic Daily reporting that Bloomberg described it as a win demonstrating Huawei's semiconductor manufacturing capability. Qualcomm said that claim is not true. The joint statement does not mention logic folding. [ 3 , 4 , 5 ]
The documents place the deal in the context of US restrictions on advanced semiconductors. China proposed the "tau law" in May to overcome those restrictions, and logic folding — described as reconfiguring a chip's internal wiring from a two-dimensional to a three-dimensional layout — is named as a core part of it. Huawei said that after years of R&D investment its intellectual property licensing business has posted positive revenue since 2021, according to Reuters, and that this is its first 5G patent licensing agreement with Qualcomm. [ 3 , 4 ]
The two companies have cooperated on patents before: Hankook Ilbo noted that Qualcomm disclosed in July 2020 that it had settled an existing patent dispute with Huawei and signed a long-term global patent agreement that also included cross-use provisions. [ 5 ]
Why it matters
The agreement is presented by Korean outlets as a sign that a Chinese company may for the first time receive more in patent fees from a major US chipmaker than it pays, reversing a relationship that began with Huawei paying Qualcomm royalties. The disputed question of whether Huawei's logic folding semiconductor technology is covered touches on China's push to work around US restrictions on advanced chips. The companies have disclosed no figures, so the financial significance of the deal remains unverified.
Key facts
- Huawei and Qualcomm agreed a multi-year patent cross-licensing deal covering 5G, computing, AI and networking, according to the companies. [ 3 , 4 , 5 ]
- Qualcomm agreed to buy some of Huawei's US patents related to computing, AI and networking, and confirmed it is buying some of Huawei's non-cellular communications US patents. [ 3 , 4 , 5 ]
- The companies did not disclose the contract value, the number of patents involved or the payment structure, which the Chinese outlet Meiri Jingji Xinwen said led to market speculation. [ 3 , 4 , 5 ]
- Huawei said the total value of the deal could exceed $6.9 billion, and that at that level it would be subject to review by the US Federal Trade Commission. [ 3 , 4 ]
- Qualcomm told Meiri Jingji Xinwen that reports describing it as the net payer under the deal are inaccurate and that the deal is not related to logic folding technology. [ 3 , 4 , 5 ]
- Bloomberg reported the licensing deal includes Huawei's recently announced logic folding chip manufacturing technology and called it a win demonstrating Huawei's semiconductor manufacturing, while Hankook Ilbo said Bloomberg cited a Huawei spokesperson. [ 3 , 4 , 5 ]
- Huawei said its intellectual property licensing business has posted positive revenue since 2021 after years of research and development investment, according to Reuters. [ 3 , 4 ]
- This is the first time Huawei has signed a 5G patent licensing agreement with Qualcomm. [ 1 , 3 , 4 ]
Confirmed by several sources
- Huawei and Qualcomm agreed a multi-year patent cross-licensing deal covering 5G, computing, AI and networking. [ 2 , 3 , 4 , 5 , 6 ]
- Qualcomm will purchase some of Huawei's US patents, including in computing, AI and networking. [ 3 , 4 , 5 ]
- The two companies did not disclose the contract value, patent count or payment structure. [ 3 , 4 , 5 ]
- Qualcomm said reports that it is the net payer under the agreement are inaccurate and that the deal is not related to logic folding technology. [ 3 , 4 , 5 ]
- Huawei said the agreement's total value could exceed $6.9 billion and would be subject to US Federal Trade Commission review at that level. [ 3 , 4 ]
- Huawei said it has earned positive revenue from its intellectual property licensing business since 2021. [ 3 , 4 ]
Still unclear
- Whether Huawei's logic folding chip manufacturing technology is included in the deal. Bloomberg reported that it is included, citing a Huawei spokesperson, while Qualcomm told Meiri Jingji Xinwen that this is not true; the joint statement does not mention logic folding.
- Which company is the net payer under the agreement. Nikkei Asia and Chosun Ilbo reported that Qualcomm would pay Huawei more than it receives, while Qualcomm called reports that it is the net payer inaccurate and said the terms are confidential.
- The contract value, number of patents covered and payment structure. The companies did not disclose these details, which the documents say prompted market speculation.
- Whether US regulators will review the deal and when it will close. Huawei said a value above $6.9 billion would bring FTC review, and Hankook Ilbo reported the transaction completes after required regulatory approvals; no approval has been reported.
What local media are saying
Timeline, local time
- Huawei and Qualcomm announce a multi-year patent cross-licensing agreement covering 5G, computing, AI and networking in a joint statement, according to the companies. [ 3 , 4 , 5 , 6 ]
- Newsis reports the first 5G cross-licensing contract between Huawei and Qualcomm, saying semiconductor technology patents are also included. [ 1 ]
- Chosun Ilbo reports that Huawei has signed a cross-licensing deal with Qualcomm and that a reversal in royalty payments is in sight for the first time in 25 years. [ 2 ]
- Yonhap reports the agreement, Huawei's expectation of a value above $6.9 billion, and Qualcomm's denial that it is the net payer. [ 3 ]
- Seoul Economic Daily reports the deal and Qualcomm's statement that the agreement is not related to logic folding technology. [ 4 ]
- Hankook Ilbo reports that the two companies' accounts differ over whether logic folding patents are included. [ 5 ]
- Chosun Ilbo follows up, reporting that Qualcomm is expected to pay Huawei more than Huawei pays Qualcomm. [ 6 ]