❯ Huawei and Qualcomm sign a multi-year patent cross-license that gives Qualcomm rights to Huawei’s LogicFolding chip technology

Cross-licenses, plus a patent purchaseHuawei and Qualcomm announced a multi-year patent license agreement on October 5 covering 5G, AI, computing and networking technologies. According to The Next Web, each gains rights to the other’s patents, and Qualcomm will also buy some of Huawei’s US patents in computing, AI, networking and other areas, subject to regulatory approval. Financial terms and royalty rates were not disclosed.

LogicFolding recognized by a rivalAccording to Bloomberg, the technologies licensed to Qualcomm include Huawei’s recently unveiled LogicFolding chip architecture and optical packaging for high-speed interconnects. Without access to ASML’s extreme ultraviolet lithography machines, Huawei has not pursued further transistor shrinking and has instead raised performance by improving data transmission inside the chip. LogicFolding is the product of that approach.

From payer to collectorHuawei first paid Qualcomm patent fees in 2001 and received its first licensing income only in 2011, from Motorola. Its licensing business has been revenue-positive since 2021. Huawei says that once this deal completes, the total value of its patent licensing agreements will exceed $6.9 billion. US trade restrictions since 2019 limit Huawei’s access to advanced chips and software and do not automatically block patent licensing.

A channel outside the sanctionsQualcomm taking a license to Huawei’s chip technology amounts to acknowledging that the technology has value. Export controls can stop equipment and chips flowing into China but do not reach intellectual property flowing the other way. Whether the deal clears review will show how US regulators view this kind of cooperation.

▮ SIGNALA company barred from buying advanced equipment is now selling technology licenses to a US chipmaker, so controls have changed where goods flow without stopping technology from creating value.