Qualcomm reportedly gets license to sell chips to Huawei on one condition

Although it’s too early to say, things seem to be looking up a bit for the beleaguered Huawei. Regulations preventing it from obtaining products and components from US companies are still in place but reports indicate that exceptions to those are being more loosely granted based on whether or not such products will be used for Huawei’s 5G business. Now another report claims that Huawei may soon be able to get its hands on much-needed Qualcomm silicon but that it hinges on the fate of subsidiary Honor.

In a nutshell, US companies are forbidden from doing business with Huawei and its many subsidiaries including Honor and HiSilicon, as part of the trade spat between the US and China. This has put severe strains on Huawei’s component supplies, particularly for one of the most important parts of any electronics product, semiconductors and processors. In response, Huawei has stockpiled these components but analysts believe it will only last it until early 2021.

Previous reports indicate that there is on favorable loophole to the US Commerce Department’s export restrictions. If components and parts, like smartphone displays and imaging sensors, for example, won’t be directly used for Huawei’s 5G business, they are able to more easily gain a license exception. That could give the company some relief as it will be able to continue making smartphones for the time being, provided it also gets access to that one critical component.

A somewhat sketchy report from China provides that answer, claiming that Qualcomm may have already obtained that permission to sell chips to China. This arrangement, however, reportedly requires that Huawei sell off its Honor subsidiary, as Qualcomm won’t be able to supply both smartphone makers’ needs at the same time. Huawei traditionally uses a mix of Qualcomm and Kirin chips for its phones but has also started looking into MediaTek since the US ban.

There is, however, still no official confirmation that these companies, including Qualcomm, Samsung, and Sony, have actually received licenses to sell to Huawei so it isn’t out of the woods just yet. The political landscape may be changing in the US soon but Huawei has always been regarded with suspicion even in previous administrations.

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