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There is no official confirmation yet, but there have been several reports that key companies have been licensed to export their products to Huawei. If true, things could improve for the Chinese tech giant, especially if Qualcomm is on that list. However, it may have been too early to burst into celebration, as more information about the terms of that exception is emerging. It turns out that while Huawei may not be running out of smartphone processors, it still won’t be able to make smartphones that can compete in an increasingly 5G market.
United States trade bans practically crippled Huawei’s ability to make smartphones. In addition to no more access to Qualcomm’s Snapdragon chips, a more recent rule from the US Department of Commerce practically prevented its HiSilicon subsidiary from making its own Kirin silicon. However, Huawei is not the only company affected by those export restrictions, and component manufacturers such as Samsung, Sony and Qualcomm have applied for licenses to continue selling some of their products.
An earlier and rather incomplete report claimed that Qualcomm was able to receive such a license, but relied on Huawei to sell its subsidiary Honor to reduce the number of chips Qualcomm needs to supply. A new report imposes an even greater restriction on what Qualcomm can and cannot export when it comes to chips, stating that it is only allowed to provide more advanced 4G chips and not 5G.
This restriction makes sense in light of rumors about a kind of loophole to the US export ban. According to those reports, the Commerce Department is more lenient in licensing if the products to be exported will not be used in Huawei’s 5G business. One could argue that that business also includes 5G smartphones.
While this Qualcomm license, if true, could alleviate some of Huawei’s supply problems, it leaves the company in the same position when it comes to competitiveness in the smartphone market. Huawei makes its own 5G chips, but they are built into its HiSilicon processors, which it can no longer produce anyway, at least when supplies of its components run out.
