Qualcomm obtains US permission to sell 4G chip to Huawei under exception to ban

(Reuters) – Qualcomm Inc. on Friday obtained a license from the US government to sell 4G mobile phone chips to Huawei Technologies Co. Ltd. of China, an exemption to US trade restrictions amid growing tensions with China.

“We obtained licenses for several products, including some 4G products,” a Qualcomm spokesperson told Reuters.

Qualcomm and all other US semiconductor companies were forced to stop selling to the Chinese technology firm in September after the US trade embargo came into force.

The spokesperson declined to comment on specific 4G products Qualcomm may sell to Huawei but said they were related to mobile devices. Qualcomm has other license applications pending with the US government, it said.

In the past, Huawei was a relatively small chip customer for Qualcomm, the largest supplier of mobile phone chips. Huawei used its home-designed chips in its flagship handset but used Qualcomm chips in lower-priced models.

Huawei’s ability to design its own chips was thwarted in September by US trade sanctions that blocked its access to chip design software and manufacturing equipment. Industry analysts believe that Huawei’s stock of the chip it bought before the ban could be bought early next year is crippling its smartphone business.

Bernstein analyst Stacey Rasgon said the Qualcomm license would have “limited impact” as it only covers 4G chips while consumers are shifting to new 5G devices. Rasgon said it was still unclear whether US officials would grant Qualcomm licenses for 5G smartphone chips.

Huawei and representatives from the US Department of Commerce, which grants the licenses, declined to comment.

Other US companies such as Micron Technology Inc. were also barred from selling to Huawei and said they had applied for a license. Intel Corp also stated that it has a license to sell to Huawei.

(Reporting by Stephen Nellis in San Francisco; Editing by Leslie Adler and Matthew Lewis)

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