For the second consecutive year, Huawei raised more in patent licenses than it paid out

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No matter how hard the US tries to punish Chinese manufacturer Huawei for posing a threat to national security, the company continues to fight back. After losing access to its US supply chain in 2019 and being forced to give up the Google Mobile Services version of Android in 2019, Huawei developed HarmonyOS with version 3.0 of the software that runs the Mate 50 series. The following year, the US forced chip foundries that used American technology to produce chips to avoid shipping advanced silicon to Huawei.

Huawei’s EUV patent could eventually help China manufacture advanced chips

Now, Huawei has permission to use 4G versions of Qualcomm’s best Snapdragon chips, and while China’s largest foundry can’t match TSMC and Samsung when it comes to producing the most powerful and energy-efficient chipsets, this could eventually change. Huawei has a patent to develop its own Extreme Ultraviolet (EUV) lithography machine. The EUV is used to etch circuit patterns onto wafers, and with billions of transistors in chips today, these patterns should be a fraction of the width of a human hair.

The main supplier of EUV lithography is a Dutch company called ASML and they are not allowed to sell these machines to China. Since the invention of the EUV helped push chips to a 7nm process node and below, Huawei’s patent could help China’s SMIC eventually compete with TSMC and Samsung Foundry. At the moment, SMIC is believed to be able to produce 7nm chips for cryptocurrency mining, but is limited to a 14nm process node for smartphone chips.

Even with a disability from Huawei, the company continues to innovate and follow Reuters, it will generate more patent royalty income by 2022 than it pays out to license patents from other companies. This will be the second consecutive year that Huawei has achieved this. Steven Geiszler, the company’s chief US intellectual property attorney, said Huawei has signed or renewed 20 patent licensing agreements this year.
Some of the companies that reached an agreement with Huawei on these deals were non-US automakers looking to improve the communication capabilities of their cars. These companies include Mercedes-Benz, Audi, Porsche and BMW. Geiszler pointed to the benefits for Huawei of closing these deals when he said, “Getting a return on our R&D investment allows us to reinvest and reinvent.”

This is a cycle that Huawei may be able to ride for some time, even with the restrictions placed on it by the US. As Geiszler points out, the technology contained in the patents that Huawei licenses is not subject to US restrictions. That’s because the technology is made public.

As it produces fewer devices, Huawei is paid for a number of cross-licensing deals

Huawei also agreed to extend its licensing deal with Nokia, which received revenue from Huawei when the deal was first signed in 2017. While Huawei has generated $1.2 billion from patent licensing over the past three years ending in 2021, still has a long way to go. to catch up with a company like Nokia that brought in $1.59 billion in patent licensing revenue in 2021 alone. Huawei’s patent license revenue for the full year 2022 will not be calculated until sometime next year.

The money generated by patent licensing still doesn’t make up for the billions of dollars in sales lost by Huawei due to the US restrictions. However, the US actions have helped Huawei become more aggressive in licensing its own patents. And with some cross-licensing deals, the company gets cash back from companies on the other side of the deal, as Huawei doesn’t produce as many devices as it used to.

Huawei saw a lot of excitement earlier this year when it released the Mate 50 smartphone line using its homegrown Xmage photography system. One of the new features of the Mate 50 Pro is the Low Battery Emergency Mode. When the phone’s battery is down to 1%, it can make calls for up to 12 minutes or put the phone in standby mode for up to three hours.

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