Huawei agrees to pay Qualcomm US$1.8 billion

Huawei Technologies has agreed to pay Qualcomm Inc US$1.8 billion to settle a patent dispute and obtain new technology licensing, US-based chip designer Qualcomm said on Thursday.

Huawei declined to comment on Thursday and neither side provided further details. 

According to insiders, the deal with Qualcomm, a 35-year-old company focusing on chip design and technology licensing, may help Huawei with 5G patents and licenses. It also also shows deep connections between global technology companies in the 5G era, despite conflicts between China and the US, they said.

Through the deal, Huawei can get complete technology patents on 5G SoC (system on a chip). SoC is an integrated circuit that integrates most components of a smartphone with the industry’s most advanced technologies and patents, analysts said.

Huawei, which is still subject to US government restrictions, trumped Samsung for the first time in the worldwide smartphone market in the second quarter, research Canalys said on Thursday.

Analysts said the US$1.8 billion deal will not be unacceptable to Huawei, considering its 200 million smartphone sales annually. It was possible, therefore, for Huawei and Qualcomm to issue cross-licensing in the settlement. 

Currently, over 70 smartphone models have taken Qualcomm’s Snapdragon 865 mobile platform, Hou Mingjuan, Qualcomm’s vice president, said in Shanghai on Thursday.