Qualcomm to supply 4G chips to Huawei as US greenlights the trade

The American multinational corporation Qualcomm has obtained a license from the U.S. government to sell 4G mobile phone chips to China’s Huawei Technologies Co Ltd, giving a relaxation on the trade restrictions imposed amid tensions with China.

In September the US trade restriction came into effect which obligated Qualcomm and other American chipmakers to pause their business with the Chinese technology companies.

“We received a license for a number of products, which includes some 4G products,” a Qualcomm spokeswoman stated. However, she refused to reveal about those specific 4G products the chipmakers are allowed to trade with Huawei but said it was related to mobile devices. Qualcomm has other license applications pending with the U.S. government, she added.

In the past, Huawei was a relatively small chip customer for Qualcomm, as the Chinese telecom company used their own chips in their flagship handsets and the Qualcomm chips in their lower-priced models.

But with the US trade ban in September, Huawei’s capacity to design its own chips was hindered as their access to chip design software and fabrication tools was suspended.

According to industry analysts, the stockpiled chips of Huawei, which they purchased before the restriction could run out early next year, trembling their smartphone business.

Bernstein analyst Stacy Rasgon opines that the current license acquired by Qualcomm will have a minimum impact because it only includes 4G chips while consumers are shifting to newer 5G devices.

Ms. Rasgon further stated that it is still unclear whether U.S. officials will grant Qualcomm licenses for 5G smartphone chips.

Other U.S. companies such as Micron Technology Inc were also restricted from trading with Huawei and now they have applied for licenses. The American tech giant Intel Corp has also received a license to sell to the smartphone makers.