$8 billion flows to competitors every year!Qualcomm is lobbying the U.S. government to lift restrictions on chip sales to Huawei

Chipmaker Qualcomm Inc is lobbying the U.S. government to lift restrictions on the sale of components to Huawei Technologies Co Ltd after the Chinese company was placed on the U.S. “entity list” of trade controls, The Wall Street Journal reported Saturday. The report cited a Qualcomm presentation as saying that Qualcomm wants to sell Huawei chips that the Chinese company will include in its 5G phones.

Through these restrictions, the U.S. handed over a market worth as much as $8 billion a year to Qualcomm’s foreign competitors, the manuscript said.

Qualcomm said the restriction “inadvertently created a huge opportunity for Qualcomm’s two overseas competitors to make money.”

The two rivals Qualcomm is referring to are MediaTek in Taiwan and Samsung Electronics in South Korea. Qualcomm said the U.S. government’s measures would hinder U.S. research and “leadership” in 5G, which is “an unacceptable outcome” for U.S. interests.

MediaTek, in particular, just broke out last week that Huawei has placed a huge order of 120 million chips from MediaTek.

Qualcomm believes that obtaining a license to deal with Huawei will generate billions of dollars in revenue for the company and help fund the development of new technologies, the report said. Conversely, it not only cheaper its overseas competitors, but also has “little impact” on Huawei, because the latter can source from other places.

Notably, the lobbying comes as Qualcomm settles a patent dispute with Huawei. Qualcomm’s financial report shows that the company reached a settlement agreement with Huawei in July this year and signed a long-term and global patent license agreement to authorize Huawei to use Qualcomm’s patented technology. Qualcomm said that under the settlement, the company will receive about $1.8 billion in related payments from Huawei.

The Wall Street Journal quoted a source as saying that before the settlement was reached, Qualcomm had applied to the U.S. government in June for a license to sell 5G chipsets to Huawei.

 

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