2026.10.11Issue #302

Qualcomm Buys Huawei's US Patents

Unpacking the undisclosed deal terms and the true flow of money behind the cross-licensing announcement.

Business

Oswarld (Kwangseob Ahn)· Writer & editor of INLEVEL9

In 2001, It Paid Royalties. Now, It Sells Patents.

Reader, on October 5, Huawei and Qualcomm issued a joint press release. The two companies announced a multi-year patent cross-licensing¹ agreement spanning 5G, computing, AI, and networking.

On its surface, this is standard industry news. Telecom patent powerhouses routinely license each other’s portfolios and renew agreements every few years. Yet attached to the tail end of that very same sentence was another clause: Qualcomm is acquiring a portion of Huawei’s US patents across computing, AI, and networking.

Huawei first paid patent royalties to Qualcomm in 2001. It took another 10 years, until 2011, for Huawei to collect royalties of its own, from Motorola. For years, Huawei was primarily on the paying end; in this announcement, an American company was listed as buying Huawei’s US patents.

In this issue, I break this news down along three threads: what the two companies directly announced, what the press reported citing company insiders, and what no one has yet disclosed. As these three became conflated, wild numbers began circulating from the very day of the announcement.

What the Joint Statement Actually Says

The announcement was brief. The terms of the deal were summarized in a Q&A section of Huawei’s release as two main points:

A cross-license covering both companies’ patent portfolios across multiple technology sectors, including 5G, computing, AI, and networking
Qualcomm’s purchase of a subset of Huawei’s US patents (spanning computing, AI, networking, and other technical fields)

The transaction will close once the required regulatory approvals are secured. The statement also included a sentence affirming that both companies adhere to licensing practices aligned with FRAND² principles.

The executive quotes were nearly symmetrical. Alan Fan, Huawei’s Chief Intellectual Property Officer, pointed to in-house contributions adopted into 5G standards—such as polar codes³—noting that the deal demonstrates the value of Huawei’s technology while acknowledging Qualcomm’s foundational contributions. John Han, Senior Vice President and head of Qualcomm Technology Licensing, stated that the agreement reaffirms Qualcomm’s 5G technology leadership and the strength of its 5G standard-essential patent (SEP)⁴ licensing program, while adding an acknowledgment of Huawei’s intellectual property.

Both sides traded the word “acknowledge.” The document was carefully drafted so each could tell their respective shareholders and government that their own technology had been recognized. Instead, the document contains no dollar figures, no contract term, no indication of which patents or how many are being transferred, and no clarity on who ultimately pays more to whom.

A Deal Lapsed for 21 Months

This was not the first patent agreement between the two companies. In July 2020, Qualcomm settled its disputes with Huawei and signed a long-term global patent license agreement covering sales starting January 1, 2020. That deal expired on December 31, 2024. The expiration date came to light not through a joint press release, but via a European Unified Patent Court ruling in litigation between Huawei and Netgear.

Traces of this expiration appeared in Qualcomm’s regulatory filings as well. Qualcomm disclosed that starting in Q2 of fiscal 2025 (January–March 2025), licensing revenue would no longer include royalties from Huawei because the agreement had lapsed. Bernstein Research estimated that Huawei’s royalties contributed 10–15 cents to Qualcomm’s earnings per share in 2024.

Chip sales had been severed even earlier. In 2024, the U.S. Department of Commerce revoked Qualcomm’s license to export 4G chips to Huawei, and Qualcomm projected no product revenue from Huawei after that year. Huawei, meanwhile, was already rolling out 5G smartphones powered by its proprietary Kirin chips.

In short, since early 2025, Qualcomm had been collecting neither chip revenue nor patent royalties from Huawei. Whether this latest agreement bridges that gap remains unknown; it has not been announced whether the new deal applies retroactively to sales from 2025 onward.

Huawei made sure to highlight one detail in particular: according to Reuters, Huawei stated that this is its first patent agreement with Qualcomm to include 5G technology.

The $6.9 Billion Figure Is Not the Value of This Deal

On the day of the announcement, posts claiming “Qualcomm paid $6.9 billion to buy Huawei patents” spread rapidly across Chinese social media. While the number did come from Huawei, that is not what it meant.

Huawei stated that once this deal closes, the cumulative total of all its patent licensing agreements will surpass $6.9 billion. This figure represents the sum of every licensing agreement Huawei has ever signed, not the value of the Qualcomm deal alone. Bloomberg reported the Huawei spokesperson’s remarks in the same context. Neither company disclosed the actual financial value of this deal.

There are clues to gauge its scale. Huawei disclosed that its patent licensing revenue for 2024 was approximately $630 million. At the same event, Huawei’s chief legal officer noted that the royalties Huawei has paid to date are nearly 3 times what it has collected. Assuming a company with annual patent revenue in the $600 million range would pull in $6.9 billion from a single deal simply does not add up.

Some interpretations suggest that “for the first time, Qualcomm has become the net payer to Huawei.” Both Nikkei Asia and the South China Morning Post reported along these lines. However, neither company’s press release mentions payment direction or net settlement figures. While purchasing patents means Qualcomm is paying for those assets, public disclosures cannot confirm who is paying more once cross-licensing is factored in.

Qualcomm as the Buyer

A license and an outright purchase are fundamentally different transactions. A license merely grants permission to use someone else’s patent, whereas an acquisition transfers ownership entirely. Once you own a patent, you can license it to other companies or assert infringement claims. The announcement did not disclose which specific patents Qualcomm is buying, nor how many.

Citing a Huawei spokesperson, Bloomberg reported that Qualcomm is also licensing patents that underpin Huawei’s LogicFolding technology. LogicFolding, a chip design and manufacturing approach unveiled by Huawei earlier this year, has been described as stacking circuitry vertically to shorten signal paths and boost performance. It is widely read as a workaround devised by Huawei after US export controls blocked its access to state-of-the-art lithography equipment. I should distinguish, however, that this explanation comes from Huawei rather than the joint announcement.

Bloomberg also reported that the transaction is subject to review by the US Federal Trade Commission (FTC) under the Hart-Scott-Rodino (HSR) Act.⁵ The companies did not clarify what specific proceedings the announcement’s phrase “required regulatory approvals” referred to. Since 2019, Washington has blocked technology from flowing into Huawei, but this time US regulators will be scrutinizing a deal moving in the opposite direction—where rights held by Huawei transfer to an American corporation.

Oswarld’s Lens

In this announcement, before asking who won, the first thing to examine is which direction the rights moved. Export controls blocked chips, equipment, and software from reaching Huawei. Patents travel along a different path. From 2020 to 2024, Qualcomm maintained licensing agreements even with Huawei, despite restrictions on chip exports, and now matters have progressed to buying and selling the patents themselves, subject to regulatory approval. In that Huawei’s rights are passing to an American firm along this route, I see this deal not as a loophole in sanctions, but as revealing the territory sanctions simply do not touch.

qualcomm buys huawei patents In joint press releases where both sides flatter each other, a word pointing in only one direction often reveals more than the quotes do. This time, “purchase” was that word. Conversely, when an undisclosed detail like the transaction value starts circulating filled with a number, it is worth checking first what that figure originally referred to.

Closing

We will only know what this deal truly changes once two things are determined: whether US authorities clear the patent acquisition, and how Qualcomm alters its language regarding Huawei in subsequent filings. For now, rather than leaning into talk of a “reversal 25 years in the making,” the far more accurate approach is to separate what was announced, what was reported, and what remains unsaid.

💬 When reading a corporate press release, what catches your eye first—the executive quotes or the hard numbers? Let me know in the comments below.

📨 If someone around you still thinks “Qualcomm just paid $6.9 billion,” please share this piece with them.

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References & Further Reading

The author is Oswarld (Kwangseob Ahn). Current roles: Adjunct Professor at Sejong University, Strategy Consultant at INLEVEL9. Career, research, books, and recent work are kept current on the About page. Latest · July 2026: HEMA-2: A Consolidation-Aware Tri-Memory Architecture with Multi-Channel Scheduling for Lifelong Conversational AI.

📝 Glossary

Footnotes

Cross-license: An agreement in which two companies grant each other permission to use their respective patent portfolios. If there is a disparity in portfolio value, one party may pay a balancing royalty to make up the difference. ↩
FRAND: Stands for Fair, Reasonable, and Non-Discriminatory. Standard-setting organizations typically require owners of essential patents to pledge that they will license them to anyone under these terms. ↩
Polar code: An error-correction coding method used in digital communications. It was adopted as the official coding scheme for control channels in the 5G standard. ↩
Standard Essential Patent (SEP): A patent covering technology that is indispensable to implementing an industry standard, such as 5G, making it impossible to comply with the standard without utilizing the patented invention. ↩
Hart-Scott-Rodino (HSR) Antitrust Improvements Act: A US federal statute requiring parties to notify the Federal Trade Commission (FTC) and the Department of Justice (DOJ) before completing mergers or asset acquisitions exceeding certain thresholds, triggering a mandatory review period. ↩