Huawei and Qualcomm disagree over who pays in their new patent cross-license

Huawei's $6.9 billion is the only figure in the record, and the two outlets that report it disagree about what it measures. Sedaily, relaying Huawei, gives it as the expected total value of this deal ^[7]. TechTimes, citing a Huawei spokesperson quoted by Bloomberg, gives it as the expected value of all of Huawei's patent licensing agreements, the Qualcomm deal included ^[8]. On the narrow reading it is about 3.8 times the $1.8 billion Huawei paid Qualcomm to settle their royalty dispute in 2020 ^[9][21]. On the wide reading Qualcomm's share is unknown, since neither company disclosed the deal's value or the number of patents covered ^[12].

Huawei's side of the story has Qualcomm licensing LogicFolding ^[3] and now paying on net, after 25 years in which royalties ran from Huawei to Qualcomm, according to Nikkei Asia ^[5]. Qualcomm disputes both points ^[4]. A middle reading lets each company be partly accurate. A portfolio cross-license spanning 5G, compute, AI, networking and optics ^[1][3] can sweep in LogicFolding patents without Qualcomm putting a separate price on them, and without the net payment running to Huawei.

I think the middle reading fits the evidence best. The part Qualcomm confirms is a purchase of some Huawei U.S. patents, which it describes as related to non-cellular communications ^[6] and which still needs regulatory approval ^[2]. A purchase puts some cash in Huawei's hands. Qualcomm's licensing chief, John Han, said the agreement "likewise reflects Qualcomm's recognition of Huawei's continued innovation and intellectual property in 5G and other technology fields" ^[16]. Huawei's IP chief, Alan Fan, said it "not only demonstrates the value of Huawei's innovations, but also recognizes Qualcomm's foundational contributions to modern communication technologies" ^[17]. Both statements are about 5G and communications, and this is the first license between the two to cover 5G ^[14].

The counter-case comes from TechTimes. It treats a cross-license as a power ranking, in which the net payer concedes that the other side's portfolio is worth more ^[18]. It also calls this the first time a U.S. chip company has formally licensed a Chinese 3D chip architecture ^[19]. If Nikkei is right about the direction of payment, the ranking holds for Huawei's portfolio as a whole. It still would not put a price on LogicFolding. The October 3 teardown is evidence that Huawei builds the stack in its own Kirin chips ^[10].

Huawei's half of the cash story is easier to follow. Without access to ASML's EUV machines, its engineers spent six years on an architecture that gains density by stacking silicon vertically ^[11]. In May, China presented "Tau's law", with logic folding seen as its core technology ^[20]. Huawei says its licensing business has been net profitable since 2021, according to Reuters ^[15]. The case that Western firms now pay for sanctions-era Chinese chip design fails if the net payment runs to Qualcomm. It also fails if the patents Qualcomm is buying turn out to be the non-cellular communications assets it describes, with no LogicFolding patents among the compute assets the announcement lists ^[2][6].