Qualcomm receives U.S. permission to sell 4G chips to Huawei in exception to ban

(Reuters) – Qualcomm Inc on Friday received a license from the U.S. government to sell 4G mobile phone chips to China’s Huawei Technologies Co Ltd, an exemption to U.S. trade restrictions imposed amid rising tensions with China.

“We received a license for a number of products, which includes some 4G products,” a Qualcomm spokeswoman told Reuters.

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

The spokeswoman declined to comment on the specific 4G products Qualcomm can sell to Huawei but said they were related to mobile devices. Qualcomm has other license applications pending with the U.S. government, she said.

In the past Huawei was a relatively small chip customer for Qualcomm, which is the biggest supplier of mobile phone chips. Huawei used its own house-designed chips in its flagship handsets but used Qualcomm chips in lower-priced 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 fabrication tools. Industry analysts believe Huawei’s stockpile of chips purchased before the ban could run out early next year, crippling its smartphone business.

Bernstein analyst Stacy Rasgon said the Qualcomm license would have a “limited impact” because it covers only 4G chips while consumers are shifting to newer 5G devices. Rasgon said it is still unclear whether U.S. officials will grant Qualcomm licenses for 5G smartphone chips.

Representatives for Huawei and the U.S. Department of Commerce, which grants the licenses, declined to comment.

Other U.S. companies such as Micron Technology Inc were also stopped from selling to Huawei and have said they have applied for licenses. Intel Corp has also said it has a license to sell to Huawei.

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