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Huawei and Qualcomm have announced a broad patent license agreement that includes cross-licenses covering 5G, compute, AI, and networking tech. As part of the deal, Qualcomm is also buying some of Huawei’s US patents in those same areas. The whole thing still needs the usual regulatory green lights.
Both sides are framing it as a win for intellectual property rights and FRAND licensing (that’s the fair, reasonable, and non-discriminatory standard everyone talks about in this space).
According to Bloomberg, the agreement even covers patents related to Huawei’s LogicFolding chipmaking technique. LogicFolding is a new architecture that speeds up data transmission to help offset the fact that they can’t get their hands on the most advanced EUV lithography equipment.
It reduces the performance gap with the industry leaders. The deal is being viewed as a bit of validation for Huawei’s chip-making efforts and a boost for its push into overseas AI markets.
Huawei also noted that once everything closes, the total value of all its patent licensing agreements should top $6.9 billion. Their IP licensing business has been making money since 2021, which is notable given the heavy R&D spending and the US export restrictions that have limited their access to advanced chips and software since 2019. This is actually the first time Huawei and Qualcomm have done a patent licensing deal that covers 5G technologies.
Qualcomm’s stock popped more than 4% in pre-market trading right after the news. The exact financial terms of the cross-license are still confidential, and Qualcomm has pushed back on some of the ways the deal has been characterized. Still, it’s a clear signal that both companies recognize each other’s technical contributions in some pretty critical fields.
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