Two giants in the mobile communications sector, Huawei and Qualcomm (NASDAQ: QCOM), have reached a broad patent licensing agreement. This time, however, the direction of payment has changed — Qualcomm (NASDAQ: QCOM) is paying Huawei for patent licensing fees.

On October 5, Huawei announced a broad patent licensing agreement with Qualcomm (NASDAQ: QCOM). Under the agreement, the two parties will engage in cross-licensing of patent portfolios across multiple technology areas including 5G, computing, artificial intelligence (AI), and networking, while Qualcomm (NASDAQ: QCOM) will also acquire several U.S. patents from Huawei in the fields of computing, AI, and networking.

This agreement not only reflects Huawei's industry leadership in the 5G standard essential patent (SEP) arena, but also demonstrates Huawei's innovative strength in cutting-edge fields such as computing, AI, and networking. Huawei stated that Qualcomm (NASDAQ: QCOM) will pay to use more than 680 of its patents, some of which are registered in the United States. The Huawei patents that Qualcomm (NASDAQ: QCOM) is licensed to use account for only 0.23% of Huawei's 296,248 granted or pending patents.

According to foreign media reports, these patent licenses also include Huawei's Near-Packaged Optics (NPO) interconnect technology. Constrained by semiconductor process limitations, Huawei has turned to seeking breakthroughs through other pathways. In May of this year, Huawei officially introduced the "Tao's Law." "Tao's Law" proposes replacing "geometric scaling" with "time scaling," achieving continued evolution of semiconductors and electronic systems through innovative technologies such as logic folding.

In September of this year, Huawei launched a self-developed smartphone chip, the Kirin 9050 Pro, featuring a new processor, and applied it to its tri-fold phone, the Mate XT2. This was the first practical application of Tao's Law. Additionally, the Ascend 960 super node that Huawei released in September used NPO technology for the first time.

Huawei stated that this is the first 5G patent licensing agreement signed between Huawei and Qualcomm (NASDAQ: QCOM), and also the first agreement between the two parties over the years that generates patent licensing revenue. Following this agreement with Qualcomm (NASDAQ: QCOM), Huawei's cumulative revenue from intellectual property patent licensing will exceed US$6.9 billion. Huawei first paid patent licensing fees to Qualcomm (NASDAQ: QCOM) in 2001, and first received patent licensing revenue from Motorola in 2011. Prior to reaching this agreement with Qualcomm (NASDAQ: QCOM), Huawei announced a patent licensing agreement with HP in August of this year.