Huawei said that Qualcomm (NASDAQ:QCOM) has applied for a license to sell it chips and the Chinese technology giant will use them in smartphones if permission is granted by the U.S. government.
China’s Huawei was put on a U.S. blacklist last year that restricted American businesses from selling products to the Chinese phonemaker. U.S. companies, including Qualcomm, were required to get a license from the government to export goods to companies on that list.
Then in May this year, Washington amended a rule to require foreign manufacturers using U.S. chipmaking equipment to get a license before being able to sell semiconductors to Huawei. The U.S. government tightened this rule in August, a move which could lead to a “near-total” cutoff for Huawei from key semiconductor.
Huawei designs its own smartphones chips called Kirin, via its HiSilicon subsidiary. But Kirin is manufactured by Taiwanese contract chipmaker Taiwan Semiconductor Manufacturing Company (NYSE:TSM). From Sept. 15, TSMC was no longer able to supply chips to Huawei.
The San Diego-based Qualcomm has been lobbying the U.S. government to allow it to export chips to Huawei, according to a Wall Street Journal report in August. The U.S. chip giant argued in a presentation seen by the WSJ that the export restrictions will hand billions of sales to Qualcomm’s competitors.
During the company’s second quarter earnings results last year, CEO Steve Mollenkopf blamed the export restrictions on Huawei for weakness in its numbers at the time.
Shares in QCOM gave back 78 cents to $113.04, while those for Taiwan Semiconductor declined 78 cents, or 1%, to $79.69.
