China's Huawei Technologies and U.S. chipmaker Qualcomm have agreed on a multiyear patent cross-licensing deal.
Huawei said on the 5th that the two companies had signed a broad, multiyear patent licensing agreement, Chinese outlet Daily Economic News reported on the 6th local time. The agreement allows the two companies to use each other's patents across multiple fields, including 5G, computing, artificial intelligence and networking.
Qualcomm also agreed to purchase some of Huawei's U.S. patents related to computing, AI and networking technologies.
Neither company disclosed the value of the deal, the number of patents covered or specific business plans, prompting a range of speculation in the market after the announcement. Qualcomm told Daily Economic News that the specific terms were confidential, while adding that reports describing Qualcomm as a net payer under the agreement were inaccurate and that claims linking the deal to logic folding technology were also untrue.
Bloomberg had reported that the licensing agreement included the logic folding chipmaking technology Huawei recently unveiled, calling it a "win" that demonstrated Huawei's semiconductor manufacturing capabilities.
China presented its "Tau's law" in May as a way to overcome U.S. restrictions on advanced semiconductors. Logic folding, seen as a core technology behind the concept, rearranges the internal wiring of a chip in three dimensions instead of the conventional two-dimensional structure.
Nikkei Asia reported that Huawei first began paying intellectual property royalties to Qualcomm 25 years ago, but that the cross-licensing and patent purchase agreement makes Qualcomm a net payer to Huawei for the first time. Qualcomm said it was true that it had agreed to buy some of Huawei's U.S. patents related to non-cellular communications.
Huawei has said that years of investment in research and development have allowed it to generate net profit from its intellectual property licensing business since 2021, according to Reuters.
It is the first time Huawei has signed a patent licensing agreement with Qualcomm covering 5G technology. Huawei said it expects the total value of the deal to exceed $6.9 billion, or about 9.2 trillion won. A deal of that size, however, could be subject to review by the U.S. Federal Trade Commission.
