Qualcomm Gets US Permission to Sell 4G Chips to Huawei in Exception to Ban

Qualcomm and all other American semiconductor firms were forced to stop selling to Huawei in September after US trade restrictions took effect.

By Reuters | Updated: 14 November 2020 10:22 IST

Qualcomm Gets US Permission to Sell 4G Chips to Huawei in Exception to Ban

Qualcomm has received license for a number of products for sale to Huawei

Highlights

It is unclear what 4G products Qualcomm can sell to Huawei
US had blocked access to chip design software and fabrication for Huawei
Qaulcomm may not be allowed to sell 5G smart phone chips

Qualcomm on Friday received a license from the US government to sell 4G mobile phone chips to China's Huawei Technologies, an exemption to US trade restrictions imposed amid rising tensions with China.

"We received a license for a number of products, which includes some 4G products," a Qualcomm spokeswoman told Reuters.

Qualcomm and all other American semiconductor companies were forced to stop selling to the Chinese technology firm in September after US trade restrictions took effect.

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The spokeswoman declined to comment on the specific 4G products Qualcomm can sell to Huawei but said they were related to mobile devices. Qualcomm has other license applications pending with the US government, she said.

In the past Huawei was a relatively small chip customer for Qualcomm, which is the biggest supplier of mobile phone chips. Huawei used its own house-designed chips in its flagship handsets but used Qualcomm chips in lower-priced models.

Huawei's potential to design its own chips was thwarted in September by US trade restrictions that blocked its access to chip design software and fabrication tools. Industry analysts believe Huawei's stockpile of chips purchased before the ban could run out early next year, crippling its smart phone business.

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Bernstein analyst Stacy Rasgon said the Qualcomm license would have a "limited impact" because it only covers 4G chips while consumers are shifting to newer 5G devices. Rasgon said it is still unclear whether US officials will grant Qualcomm licenses for 5G smart phone chips.

Representatives for Huawei and the US Department of Commerce, which grants the licenses, did not immediately return requests for comment.

Other US companies such as Micron Technology were also stopped from selling to Huawei and have said they have applied for licenses. Intel has also said it has a license to sell to Huawei.

© Thomson Reuters 2020

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