Qualcomm to buy Huawei US patents in multi-year 5G and AI licensing deal

Qualcomm has agreed to acquire some of Huawei’s US patents under a multi-year licensing agreement that Huawei announced on 5 October. The deal also gives each company licenses to the other’s patent portfolio across 5G, compute, AI and networking. It does not change the US export restrictions that have required American companies to obtain a license before selling chips and software to Huawei since 2019.

The patents Qualcomm is buying cover compute, AI, networking, and other technologies. Huawei said the transaction will close once the necessary regulatory approvals are in place. Neither company disclosed the financial terms or identified the specific patents involved.

The South China Morning Post reported that the agreement marks the first time Qualcomm has agreed to pay to license and acquire patents from Huawei. Both companies said the cross-licenses follow fair, reasonable, and non-discriminatory (FRAND) principles, the standard used for licensing patents that are essential to industry standards such as 5G.

Alan Fan, Huawei’s chief intellectual property officer, pointed to the company’s contributions to the 4G and 5G standards, including signal transmission technology based on polar codes. “This agreement not only demonstrates the value of Huawei’s innovations but also recognizes Qualcomm’s foundational contributions to modern communication technologies,” Fan said.

John Han, executive vice president and general manager of Qualcomm Technology Licensing, said the agreement “reaffirms industry recognition of Qualcomm’s 5G technology leadership and the success of Qualcomm’s 5G SEP licensing program.” He added that it “likewise reflects Qualcomm’s recognition of Huawei’s continued innovation and intellectual property in 5G and other technology fields.”

Huawei made its first licensing payment to Qualcomm in 2001. In 2020, the two companies settled a dispute with a long-term license under which Huawei paid Qualcomm $1.8 billion in back licensing fees. Huawei earned its first licensing income in 2011, from Motorola.

Huawei expects the Qualcomm agreement to take the total value of its patent licensing contracts past $6.9 billion once completed. The company has raised research and development spending since those restrictions limited its access to advanced chips and key software. The Qualcomm deal follows a licensing agreement with HP Inc. that Huawei announced back in August.