China’s Huawei Technologies has agreed to a broad, multi-year patent licensing deal with US chipmaker Qualcomm, covering technologies including artificial intelligence, 5G, computing and networking.
The agreement marks the first patent licensing deal between Huawei and Qualcomm to cover 5G technologies. It also includes Qualcomm’s purchase of certain Huawei US patents related to computing, AI and networking, according to Huawei.
Under the agreement, the two companies will cross-license their patent portfolios across several technology fields. Qualcomm will also purchase certain Huawei US patents covering computing, AI, networking, and other technologies.
The transaction will proceed upon receipt of the relevant regulatory clearances. Financial details of the contract are yet to be disclosed.
According to Huawei, this transaction is likely to raise the total value of its patent license agreements to more than USD 6.9 billion. Huawei also said its IP license business has posted positive revenue since 2021, driven by years of heavy R&D investment.
Huawei has increased its research and development spending in recent years as US trade restrictions introduced since 2019 have limited its ability to buy advanced chips and crucial software.
The company has increasingly relied on its intellectual property portfolio for licensing revenue. Huawei made its first licensing payment to Qualcomm in 2001, while it received its first licensing income in 2011 from Motorola.
The latest agreement with Qualcomm follows a licensing deal with HP Inc., which Huawei announced in August.
By introducing 5G technologies into the agreement, this is an important step forward for the two firms. Huawei and Qualcomm have intellectual property assets that cover communications and other technologies. The new agreement broadens the partnership to include 5G technologies.
This agreement comes amid ongoing US-China tensions over technology, with Huawei facing restrictions on access to cutting-edge chips and software since 2019. Meanwhile, it has made heavy R&D investments and licensed out its intellectual property.
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The patent licensing agreement will require the necessary regulatory approvals before it can be completed. Neither company disclosed the transaction’s financial value.
The deal will strengthen Huawei’s existing patent licensing business and push the total value of its patent licensing deals past USD 6.9 billion. According to Huawei, its intellectual property licensing business has been profitable since 2021.
The deal shows the value patents on key technologies like 5G, artificial intelligence, computing, and networking still have, despite the technology and trade friction Huawei and Qualcomm operate in.