US Gives Permission To Qualcomm To Sell 4G Chips To China’s Huawei

A special license was granted to Qualcomm Inc on Friday by the United States government allowing the company to now sell 4G mobile phone chips to China’s Huawei Technologies Co Ltd in what is an exemption to trade restrictions imposed by the Trump administration on the Chinese firm as trade and geopolitical tensions increase between the US and China.

“We received a license for a number of products, which includes some 4G products,” a Qualcomm spokeswoman told the media.

With a sanction against Huawei taking effect in September this year, Qualcomm and all other American companies manufacturing semiconductors were forced to stop selling to the Chinese technology company.

No comments were made by the spokeswoman on the specific 4G products that Qualcomm has been given permission to sell to Huawei but said that the license was related to sale of mobile devices. She added that other license applications filed with the US government previously is still pending.

For the biggest supplier of mobile phone chips of the world Qualcomm, Huawei was a relatively small chip customer in the past. Its flagship handsets were essentially fitted with the chips that had been designed and manufactured by the company itself. The company used chips from Qualcomm for its lower-priced smartphone models.

But a US sanction on the company that essentially blocked Huawei’s access to chip design software and fabrication tools resulted in the potential of the Chinese company to design its own chips being thwarted. As a consequence, the smart phone business of the company could be crippled as the stockpile of chips that the company had purchased before the ban would run out early next year, believes many industry analysts.

Since the special license awarded to Qualcomm only covers 4G chips while consumers are shifting to newer 5G devices, therefore the license would have a “limited impact”, said Bernstein analyst Stacy Rasgon.

It is still unclear whether US officials will grant Qualcomm licenses for 5G smart phone chips, Rasgon said.

There were no comments on the issue available from the representatives for Huawei and the US Department of Commerce, which grants the licenses.

There are other American companies such as Micron Technology Inc that have been prevented from selling any of their products to Huawei and the companies have said that they have applied for special licenses form the US government.

Intel Corp has also said it has a license to sell to Huawei.

(Adapted from Reuters.com)

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