Qualcomm to pay Huawei in reversal of 25-year patent deal

Qualcomm and Apple renewed their global patent licensing agreement, effective April 1, 2027. The deal includes a multi-year chipset supply agreement, with Apple expected to use Qualcomm modems in some iPhones starting in 2023.

Qualcomm and Arm are in a five-day jury trial over a contract dispute stemming from Qualcomm's 2021 acquisition of Nuvia. Qualcomm alleges Arm violated their contract by withholding chip-testing tools and seeks to halt royalty payments for up to five years. Arm denies these claims. The outcome could impact billions in royalties and future chip technology negotiations. Arm's revenue from Qualcomm is estimated at 9% of its 2026 fiscal year revenue, according to Intellectia.

Qualcomm and Arm began a five-day trial in Delaware. Qualcomm seeks to halt royalty payments to Arm for up to five years, potentially saving billions. The outcome could impact Qualcomm's financials and Arm's revenue.

Qualcomm licensed Huawei's LogicFolding 3D chip patents in a multi-year cross-license deal. Huawei expects its patent licensing agreements, including this deal, to exceed $6.9 billion. The agreement covers 5G, AI, computing, and networking technologies. Huawei's chip architecture, developed under U.S. sanctions, was independently verified by a teardown.

Qualcomm (QCOM) shares fell 1.34% to $182.40 on Monday after announcing a multiyear patent cross-license with Huawei, covering 5G, AI, and networking. The deal's financial impact is unclear. Huawei's total patent agreements are expected to exceed $6.9 billion, but this figure includes multiple deals. Qualcomm's shares are 4.08% above the GF Value estimate of $175.25.

Goldman Sachs identified Applied Materials (AMAT), Seagate Technology (STX), and Microchip Technology (MCHP) as tactical buys ahead of earnings, citing favorable entry points after a sector pullback. The firm expects strong performance in semiconductor equipment, compute, and storage. AMAT is up 110.14% YTD, STX 208.29%, and MCHP 27.62%.