China's Huawei Technologies has signed a broad multi-year patent licensing agreement with American chip designer Qualcomm, covering artificial intelligence, 5G, computing and networking technologies, Huawei said on Monday.
The deal is notable on several fronts. It is the first patent licensing agreement between the two companies that covers 5G technologies, and the first under which Huawei licenses and assigns patents in computing, AI and networking to the US chip designer. As part of the arrangement, Qualcomm will also purchase certain Huawei patents in the United States related to computing, AI and networking.
A $6.9 billion licensing pipeline
Huawei said the agreement is expected to push the total value of its patent licensing contracts to more than $6.9 billion once completed. The company has built a substantial intellectual property portfolio: it said its IP licensing business has been generating positive revenue since 2021, reflecting years of heavy investment in research and development.
Huawei ramped up its R&D spending in recent years, even as US trade restrictions since 2019 limited its ability to buy advanced chips and crucial software. The licensing business has become one of the ways the company monetises that investment.
Two decades of dealings
The two companies have a long history of working together on intellectual property. Huawei made its first licensing payment to Qualcomm in 2001, and received its first licensing income from Motorola in 2011.
The Qualcomm agreement follows a cross-licensing deal with HP covering Wi-Fi technology patents that Huawei announced in August, underscoring that the Chinese company remains a major patent holder in information and communications technology despite years of US sanctions.
The financial terms of the Qualcomm deal were not disclosed. The agreement will close once regulatory approvals are received.
Sources:
Reuters: Huawei agrees to a multi-year patent licensing deal with Qualcomm
Morningstar/Dow Jones: Huawei, Qualcomm Sign Patent Deal Covering 5G, AI and Networking Tech
The deal is notable on several fronts. It is the first patent licensing agreement between the two companies that covers 5G technologies, and the first under which Huawei licenses and assigns patents in computing, AI and networking to the US chip designer. As part of the arrangement, Qualcomm will also purchase certain Huawei patents in the United States related to computing, AI and networking.
A $6.9 billion licensing pipeline
Huawei said the agreement is expected to push the total value of its patent licensing contracts to more than $6.9 billion once completed. The company has built a substantial intellectual property portfolio: it said its IP licensing business has been generating positive revenue since 2021, reflecting years of heavy investment in research and development.
Huawei ramped up its R&D spending in recent years, even as US trade restrictions since 2019 limited its ability to buy advanced chips and crucial software. The licensing business has become one of the ways the company monetises that investment.
Two decades of dealings
The two companies have a long history of working together on intellectual property. Huawei made its first licensing payment to Qualcomm in 2001, and received its first licensing income from Motorola in 2011.
The Qualcomm agreement follows a cross-licensing deal with HP covering Wi-Fi technology patents that Huawei announced in August, underscoring that the Chinese company remains a major patent holder in information and communications technology despite years of US sanctions.
The financial terms of the Qualcomm deal were not disclosed. The agreement will close once regulatory approvals are received.
Sources:
Reuters: Huawei agrees to a multi-year patent licensing deal with Qualcomm
Morningstar/Dow Jones: Huawei, Qualcomm Sign Patent Deal Covering 5G, AI and Networking Tech
