Abstract:
Twenty-five years ago, Huawei paid patent licensing fees to Qualcomm for the first time. 25 years later, Qualcomm will purchase some of Huawei’s U.S. patents, and the scope of cooperation between the two parties will also extend to AI. On October 5, Huawei and Qualcomm announced a multi-year, wide-ranging patent licensing agreement covering 5G, computing, artificial intelligence and networking. The agreement also includes an asset transaction: Qualcomm will acquire some of Huawei's U.S. patents in computing, AI, networking and other technology fields. The transaction still needs to obtain relevant regulatory approvals.
Picture: Huawei official website
At present, the two parties have not disclosed the transaction amount, licensing rate and specific patent list. Huawei also stated that this transaction does not involve other business cooperation.
What is more noteworthy about this agreement is that the positions of both parties in the patent transaction have changed.
According to Reuters, under the new cross-licensing arrangement, Qualcomm will become Huawei's net payer for the first time. For a long time in the past, Huawei was more of a payer in Qualcomm's patent system. Now Qualcomm has also begun to pay for the technical assets accumulated by Huawei.
In 2001, Qualcomm and Huawei signed a CDMA commercial license agreement. Huawei was authorized by Qualcomm's CDMA patent portfolio to develop, produce and sell related network equipment. This is also the first time Huawei has paid patent licensing fees to Qualcomm.
In 2020, the two parties resolved the previous patent dispute and signed a new long-term licensing agreement. At that time, Qualcomm recognized approximately $1.8 billion in revenue from Huawei, including settlement payments and new patent licensing fees.
Six years later, the relationship between the two families has taken another step forward. Moreover, the biggest difference in this round of negotiations is that the technology on the table has gone far beyond traditional mobile communications.
Bloomberg reported that Huawei revealed that the agreement involves 5G equipment, AI services, near-package optics (NPO), co-package optics (CPO) and network technologies. Qualcomm will also obtain relevant patent licenses that support Huawei’s Logic Folding (logic folding) chip technology.
It is reported that logical folding is a core technology of Huawei's "Tao's Law". This is a set of chip architecture ideas disclosed by Huawei this year. By reorganizing and shortening the signal transmission path, it will continue to improve chip performance despite the limitations of advanced processes. The Kirin 9050 Pro released this year has already adopted the relevant architecture.
This shows that the technologies Huawei has invested in chip architecture, computing, AI and optical interconnection fields in the past few years have also begun to enter the patent trading system of global companies.
Behind this is the technology stock formed by long-term high investment in R&D.
In 2025, Huawei's R&D investment will reach 192.3 billion yuan, accounting for 21.8% of annual revenue; the cumulative R&D investment in the past ten years has exceeded 1.38 trillion yuan. As of the end of 2025, Huawei holds approximately 165,000 valid patents worldwide and has signed more than 260 patent license and cross-license agreements with major global patent holders.
In the past few years, Huawei has also taken the initiative to turn these patents into revenue. It is reported that Huawei’s intellectual property licensing business has achieved positive revenue since 2021.
After the Qualcomm transaction is completed, the total value of Huawei's existing patent licensing agreements is expected to exceed US$6.9 billion. It should be noted that the US$6.9 billion is not the amount paid by Qualcomm this time, nor is it equal to the cash income that has been received, but the value corresponding to Huawei's overall patent license agreement.
This change has another meaning in the current industrial environment. In the past few years, Huawei has had fewer channels to obtain some advanced chips, equipment and software from the international market, and Huawei's choices in the hardware supply chain have also significantly narrowed. Patents are a different class of asset. Even if the product and supply chain are restricted, as long as the technology enters industry standards or is adopted by other companies' products and systems, commercial returns can still be realized through licensing, cross-licensing and patent sales.
For Qualcomm, this is also a realistic business.
Qualcomm has long relied on two business models: chip sales and patent licensing. Even if Huawei reduces its purchases of Qualcomm chips, there will still be a lot of overlap in the technical landscapes of both parties in 5G, computing, AI and networking. As long as each other needs to use the key patents held by the other, it will be difficult for the two companies to completely bypass each other at the technical level.
So, the significance of this agreement is not that Huawei and Qualcomm are getting closer again. To be more precise, the two companies are forming a new relationship: they continue to compete at the product level, and the supply chain relationship has changed significantly, but at the intellectual property level, both parties increasingly need to price each other's technology.
For Huawei, this is more worthy of attention than simply increasing patent revenue. The technological assets formed by years of R&D investment are further extending from communication standards to chips, computing and AI, and are beginning to obtain prices directly offered by global peers in real money.
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