Qualcomm warns the US government: If it does not sell chips to Huawei, it will give away $8 billion of market share to competitors every year

eric_wang

Qualcomm warns the US government: If it does not sell chips to Huawei, it will give away $8 billion of market share to competitors every year [Copy link]

 

According to a report by the Wall Street Journal on August 8, US chip giant Qualcomm is lobbying the Trump administration, calling for the removal of restrictions on the company's sales of chips to Huawei.

The report cited a Qualcomm briefing as saying that the company told U.S. policymakers that their export ban would not prevent Huawei from obtaining necessary components, but would instead hand over an $8 billion annual market to its overseas competitors. The

Trump administration has been trying to cut off Huawei's supply chain. In May 2019, the U.S. Department of Commerce added Huawei and its 70 branches to the "Entity List", prohibiting Huawei from purchasing from U.S. corporate suppliers, but has since repeatedly extended its "temporary license."

Until May 15 this year, the United States once again announced the extension of Huawei's "temporary license" until August 13. At the same time, the U.S. Department of Commerce has brought out new regulations: Even if the chip itself is not developed and designed by the United States, as long as foreign companies use U.S. chip manufacturing equipment, they must obtain permission from the U.S. government to provide chips to Huawei or its affiliates.

Qualcomm said the restriction "inadvertently created huge money-making opportunities for Qualcomm's two overseas competitors."

The two rivals Qualcomm refers to are MediaTek in Taiwan, China, and Samsung Electronics in South Korea. Qualcomm said that the US government's measures will hinder the United States' research and "leadership" in the 5G field, which is "an unacceptable result" for US interests. According to

reports, Qualcomm believes that obtaining a license to trade with Huawei will bring billions of dollars in revenue to the company and help fund the development of new technologies. On the contrary, it not only makes its overseas competitors cheaper, but also has "little impact" on Huawei because the latter can purchase from other places.

It is worth noting that this lobbying comes at a time when Qualcomm is resolving its patent dispute with Huawei. Qualcomm's financial report shows that the company has reached a settlement agreement with Huawei in July this year and signed a long-term and global patent licensing agreement to authorize Huawei to use Qualcomm's patented technology. Qualcomm said that according to the settlement agreement, the company will receive about $1.8 billion in related revenue from Huawei.

The Wall Street Journal quoted a source as saying that before the two sides reached a settlement, Qualcomm had applied to the US government in June this year for a license to sell 5G chipsets to Huawei.