Qualcomm Wants Huawei’s Phone Chipset Business

Mobile chipmaking giant Qualcomm has petitioned the U.S. government to let it provide smartphone chipsets to Huawei, the China-based telecommunications giant. The rationale is solid: By cutting off the firm, which makes more smartphones than any other company besides Samsung, from U.S.-based technology firms, the government is taking $8 billion in revenues from them every year.

News of the petition was reported by The Wall Street Journal, which viewed a Qualcomm presentation explaining its argument to the U.S. government.

According to the Journal, Qualcomm has an interesting angle to its argument: That it be allowed to not just sell smartphone processors, so-called system-on-a-chip (SoC) designs, but also the 5G chipsets that will be necessary for next-generation cellular networks. The U.S. sanctions against Huawei are based solely on the firm’s networking supremacy, and not on its smartphone business. So letting Qualcomm, an American firm, have this business would be particularly beneficial, and could change some minds in Washington.

Qualcomm argues in the presentation that the U.S. is in effect sending $8 billion each year to Chinese companies thanks to its sanctions, and that this hurts the U.S.-based companies that their government is trying to protect. It also notes that a September escalation of the sanctions will simply drive Huawei to seek non-U.S. partners that can meet its needs as Chinese firms ramp up their design and manufacturing capabilities.

“If Qualcomm is subject to export licensing, but its foreign competitors are not, U.S. government policy will cause a rapid shift in 5G chipset market share in China and beyond,” Qualcomm correctly notes.
“This is an unacceptable outcome for U.S. interests.”

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Conversation 3 comments

  • Paul Thurrott

    Premium Member
    09 August, 2020 - 5:04 pm

    <p>We had a self-inflicted site glitch this afternoon that deleted all four of my posts today, including any comments you may have made. I've republished the posts, but there's no way to get the comments back, sorry. –Paul</p>

  • bluvg

    10 August, 2020 - 12:32 am

    <p>Someday the history books will look to examples like how these policies are damaging Qualcomm as cautionary tales about how the #1 economy in the world hastened its own downfall.</p>

  • bart

    Premium Member
    10 August, 2020 - 6:56 am

    <p>I wonder how this will go down in China. Huawei being knee-capped and now having to buy from a US supplier.</p>


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