TMTPOST – Qualcomm, the U.S. semiconductor giant, recently disclosed in an official filing its revenue from Huawei prior to the U.S. Department of Commerce’s revocation of export licenses.  

In a 10-K annual report submitted to the U.S. Securities and Exchange Commission (SEC) earlier this month, Qualcomm revealed on page 20 that the company generated approximately $560 million in revenue from Huawei products during its fiscal year ending September 29, 2024. This was before the Department of Commerce revoked Qualcomm’s license to export 4G and certain other integrated circuit products to Huawei on May 7.

Qualcomm stated that following the license revocation, it does not expect to receive any revenue from Huawei products. However, the impact of Huawei devices on other manufacturers using Qualcomm products could further affect Qualcomm’s revenue, operating results, and cash flow.

This disclosure marks a rare instance of Qualcomm openly detailing revenue associated with Huawei. Previously, fees from Huawei were grouped under Qualcomm's broader revenue from China.  

During Qualcomm’s Q3 2024 earnings call in September, Alex Rogers, the president of Qualcomm Technology Licensing, noted ongoing efforts to maintain cooperation with Huawei. Huawei is one of the companies Qualcomm is actively engaging with, just like others. Negotiations are ongoing, and Qualcomm expects this situation to continue, Rogers said.

Qualcomm and Huawei have had a complex relationship shaped by both partnership and U.S. export restrictions. In July 2020, Qualcomm announced a settlement and a long-term patent licensing agreement with Huawei worth $1.8 billion. This agreement represented a significant portion of Huawei’s total $6 billion annual patent licensing payments, 80% of which reportedly went to U.S. companies, with Qualcomm being the largest recipient.  

Despite these ties, U.S. export controls have pressured Huawei to rely more on in-house solutions. Since 2023, Huawei’s return to the 5G smartphone market with its Kirin chips has diminished its reliance on Qualcomm.  

In May 2024, the U.S. Department of Commerce revoked Qualcomm’s license to supply 4G chips to Huawei, a move that also impacted companies like Intel and Microsoft. Huawei’s rotating chairman, Richard Yu, confirmed in September that Huawei’s PCs would soon transition from using Windows to HarmonyOS.  

Qualcomm’s latest earnings report reveals total revenue of $33.19 billion for fiscal year 2024, a 9% year-over-year increase driven by AI, smartphones, and growth in the Chinese market. Sales of Android smartphones in China increased by 40% during the fiscal year, with China contributing 46% of Qualcomm’s total revenue at $17.826 billion.  

For the first time, Qualcomm disclosed revenue by customer headquarters rather than manufacturing location, providing a clearer picture of its China-related business.

Looking ahead, Huawei’s licensing agreement with Qualcomm is set to expire at the end of 2024. Rogers expressed hope for continued collaboration despite the current restrictions. Qualcomm deeply values the partnership with Huawei and hope to find ways to work together in the future, he said.  

Huawei’s founder Ren Zhengfei has previously emphasized the importance of collaboration in advancing technology. In 2018, he noted that Huawei will always be a partner of companies like Qualcomm, Intel, Broadcom, Apple, and Google, working together to create advanced products for the humanity.

As U.S. sanctions force Huawei to adopt more self-reliant strategies, the future of its partnership with Qualcomm remains uncertain.