Qualcomm receives US clearance to sell 4G chips to Huawei as an exception to ban

Qualcomm Inc on Friday received a license from the US government to sell 4G cell phone chips to China’s Huawei Technologies Co Ltd, an exemption from US trade restrictions imposed amid mounting tensions with China.

“We have been licensed for a number of products, including some 4G products,” a Qualcomm spokeswoman told Reuters.

Qualcomm and all other U.S. semiconductor companies were forced to stop selling to the Chinese tech firm in September after U.S. trade restrictions took effect.

The spokesperson declined to comment on specific 4G products Qualcomm may sell to Huawei, but said they were linked to mobile devices. Qualcomm has other pending license applications from the U.S. government, she said.

In the past, Huawei was a relatively small chip customer for Qualcomm, which is the largest supplier of mobile phone chips. Huawei has used its own home-designed chips in its flagship handsets, but has used Qualcomm chips in cheaper models.

Huawei’s potential to design its own chips was thwarted in September by U.S. trade restrictions that blocked its access to chip design software and manufacturing tools. Industry analysts believe the stock of chips Huawei bought before the ban could run out early next year, crippling its smartphone business.

Bernstein analyst Stacy Rasgon said the Qualcomm license would have “limited impact” as it only covers 4G chips as consumers look to newer 5G devices. Rasgon said it was still not clear whether U.S. officials would license Qualcomm for 5G smartphone chips.

Representatives from Huawei and the U.S. Department of Commerce, which grants the licenses, did not immediately return requests for comment.

Other US companies such as Micron Technology Inc have also been barred from selling to Huawei and said they have applied for licenses. Intel Corp also said it has a license to sell to Huawei.