Qualcomm, the US chipmaker best known for mobile processors and wireless modem technology, has signed a multiyear patent agreement with Huawei Technologies, Reuters reported.
The deal spans 5G, artificial intelligence, computing and networking.
It includes Qualcomm's purchase of certain Huawei US patents and licences tied to Huawei's LogicFolding chip technology.
Huawei expects the total value of its patent licensing to exceed $6.9 billion once the deal closes, Bloomberg reported.
Royalty payments
Huawei royalty payments to Qualcomm stopped in the second quarter of fiscal 2025, when the companies' prior licence expired.
New deals with other Chinese handset makers only partly offset the loss.
The new arrangement reaches into areas tied to AI infrastructure, such as near- and co-packaged optics (technology that places optical components close to the chip) and networking.
It comes as Qualcomm tries to rebuild its growth story around data centres, custom silicon and automotive chips rather than smartphones.
Weak demand
Weak smartphone demand, higher manufacturing costs and falling Apple-related revenue have weighed against enthusiasm for the pivot.
At its Investor Day in June, chief executive Cristiano Amon said: "It's time to start a new chapter at Qualcomm."
The company is targeting at least $15 billion in data-centre revenue by fiscal 2029 and $40 billion in total non-handset revenue.
Qualcomm has lined up a multigenerational deal to supply Meta Platforms with its Dragonfly C1000 data-centre CPU, with production expected in the second half of 2028.
AWS deal
In September it struck a partnership with Amazon Web Services covering custom AI inference silicon and optical connectivity.
BofA Securities analyst Vivek Arya, who rates the stock Underperform, said Qualcomm is "re-entering a fast-growing but hyper-competitive AI market full of large incumbents."
He named Nvidia, Broadcom and AMD among those rivals.
Qualcomm has separately renewed its global patent agreement with Apple, effective 1 April 2027.
