Qualcomm can sell chips to Huawei again, with one huge caveat

What you need to know

• Qualcomm has received permission to resume business with Huawei despite current sanctions.
• The licenses are related to the sale of 4G technology from Qualcomm.
• Lack of access to 5G technology could still affect Huawei, which is low on Kirin chips.

Huawei is getting a much-needed break in the form of newly obtained licenses giving Qualcomm permission to sell chips to the smartphone maker. This comes after over a year of sanctions imposed by the U.S., barring companies from supplying components to Huawei. And while it should provide some relief for Huawei, it comes with a major caveat.

A spokeswoman from Qualcomm told Reuters that they've "received a license for a number of products, which includes some 4G products." This means that while the world is making its transition into 5G, which has been a major selling point for smartphones this year, Huawei seems limited to only 4G technology from Qualcomm.

This would put a major stick in the spokes as Huawei has been running out of chips due to tightened restrictions that the U.S. imposed this year. TSMC, which makes Huawei's Kirin chips, has been unable to take orders for more chips since May. "This year may be the last generation of Huawei Kirin high-end chips," said Richard Yu, CEO of Huawei's consumer business unit.

For months, Qualcomm has tried to obtain licenses to resume business with Huawei, even lobbying to ease restrictions on supplying components for Huawei's 5G smartphones. At the same time, the U.S. has been focused on overtaking China in the 5G race, and Huawei is a major part of the country's efforts. Blocking access to Qualcomm's 5G technology would further slow Huawei's efforts.

It's unclear as to the exact nature of the licenses acquired by Qualcomm, which currently sells a number of chips with integrated 5G modems. The current flagship Snapdragon 865, which is found in most of this year's best Android smartphones, is not integrated, and as our Alex Dobie points out could potentially leave the door open for Huawei to use said chip with a 4G modem instead. There's still the matter of the upcoming Snapdragon 875, which could feature an integrated 5G modem, making the situations somewhat unclear for future Huawei flagships.