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A China Business News writer heard on November 13 from upstream supply chain suppliers that Qualcomm had secured a license to market 4G chips to Huawei.
Friday, November 13, 2020, 3:13 GMT
“(4G chip license) I got it two days ago, and the 5G chip has not yet been approved.” Reporters were informed by a senior executive of a public firm in the Huawei supply chain. The cell phone ODM market is one of the major companies of the group and it deals closely with Qualcomm and Huawei.
Qualcomm had aggressively promoted the US government, according to the reporter’s interpretation, to encourage it to collaborate with Huawei. Cooperation with Huawei on 4G chips has been steadily developed, with the Huawei Xi’an Research Institute being the main force. This period, after receiving the license, it is planned to expand the production potential of Huawei for 4G cell phones.
Both officials from Huawei and Qualcomm confirmed that they would not respond to the news above.
Qualcomm is one of Huawei’s largest chip vendors. QCT (chip business) and QTL (patent business) are used in the sales composition. In CDMA and other code division multiple access underlying protocols, the firm depends on its patent advantages. Patents are collected from smart phone makers.
Qualcomm’s QTL market sales in fiscal year 2019 was as high as US$4.59 billion, it is known. Huawei’s patent accumulation, however, is now quickly followed up, so Qualcomm’s patent royalties will no longer be paid as of April 2017, and it has also impacted collaboration between the two firms. The percentage of Qualcomm processors in Huawei subsequently decreased rapidly from 40 percent. The ratio has fallen to single digits.
It is worth noting that Qualcomm reported in its fourth quarter financial report on 4 November, US time, that it had earned US$1.8 billion in Huawei patent fees. Qualcomm President Cristiano Amon said at the earnings conference that Huawei has provided an incentive to broaden its future demand for Qualcomm’s mobile chip sector (QCT). It would be an entirely positive chance if you can acquire a license to sell to Huawei.
Furthermore the reporter heard from individuals close to the supply chain of Huawei that several core components were steadily released, including displays and images.
Almost 10 manufacturers have previously stated that they have demanded continued US supply licenses, including TSMC, MediaTek, Western Digital, SMIC, Macronix, SK Hynix, Samsung, etc. Currently, several chip manufacturers have received licenses to supply Huawei, including Intel, AMD, and Skyworks.
At the fourth quarter financial report meeting of the 2020 fiscal year on November 4, the chip supplier Skyworks reported that it has acquired a small license to ship certain goods to Huawei and is currently consulting with Huawei to explain what products they need and want. Huawei used to be the second biggest customer of Skyworks, the market path of the latter is largely radio frequency technology.
Canalys analyst Jia Mo told reporters that more firms would be able to receive approval from the United States in the future to ship to Huawei again, judging from the current situation. Although Huawei has slowed down exports, it has not relinquished its partnership with wide networks, and is expected to stabilize its market share. Huawei can devise more aggressive strategies to reclaim the market in the future after the supply chain is stabilized.
“But Huawei sources assured reporters that 5G devices will be the mass market next year and the current situation remains difficult to proceed.