It seems Donald Trump’s election loss in the US is not just related to his dwindling days as president. Despite an executive order barring US companies from doing business with Huawei and essentially leaving the company without access to essential Google and US design chipsets, Reuters is reporting that the US government has given Qualcomm permission to once again sell 4G Mobile chips to the company.
For Huawei this is critical as despite the company’s best efforts to try and build its own semiconductors, it was still heavily reliant on chips designed by Qualcomm and they would’ve likely run out of the materials to manufacture more phones in the near future had this intervention not kicked in.
This was not just charity for Huawei, but probably due to the loss of business, it would have caused financial headaches for Qualcomm. With Huawei one of the world’s largest smartphone manufacturers, their business would make a sizable improvement into the future financial wellness of Qualcomm and it only makes sense to keep the partnership going on both sides to ensure their mutual survival.
What is critical though in this news is that the license to Qualcomm only allows it to sell 4G chips and not 5G, which will be needed for newer devices. It’s not clear exactly what Huawei will be doing or if perhaps it plans to have another plan for newer 5G models. I also think that Huawei needs to find a way to rapidly solve its Google problem too, as this will continue to have a big impact on future sales. Especially now that Samsung has dethroned the company.
Last Updated: November 16, 2020