The Wall Street Journal reported that Qualcomm Inc. is lobbying the Trump Administration to roll back restrictions on the sale of advanced components to Huawei Technologies. Qualcomm wants to sell chips for Huawei 5G phones.
Qualcomm is telling U.S. policy makers their export ban won’t stop Huawei from obtaining necessary components and just risks handing billions of dollars of Huawei sales to the firm’s overseas competitors, according to a presentation reviewed by The Wall Street Journal that the San Diego-based company has been circulating around Washington.
In May of 2020, the U.S. Department of Commerce unveiled a rule that expands U.S. authority to require licenses for sales to Huawei Technologies of semiconductors made abroad with U.S. technology. The rule greatly expanded the ability of the United States to halt exports to Huawei.
The result of the rule is that Huawei is running out of smartphone chips. The company no longer has the access to the manufacturing it needs to continue making the Mate 40s Krin 9000 processor. As such, supplies of the Mate 40 smartphone will be limited.
According to The Wall Street Journal, Qualcomm is arguing that granting it a license to sell chips to Huawei would generate billions of dollars in sales for Qualcomm and help it fund development of new technologies.
Qualcomm’s lobbying effort comes after a resolution of a patent-rights dispute with Huawei. Qualcomm will receive a $1.8 billion lump-sum payment from Huawei to cover previously unpaid licensing fees. The settlement includes a multiyear agreement to license Qualcomm’s patented technologies for Huawei use.
Based on this, it seems to me that Qualcomm will have a problem if it fails to convince the U.S. government to grant it the license it is seeking. I don’t see how the company could make use of the multiyear agreement with Huawei without having that license.