Nikkei Asia sources said that Huawei's goal in this lawsuit is to collect royalties, thereby reinvesting in research and development activities. In addition, the move is also a way for Huawei to demonstrate its technological capabilities to the world .

MediaTek confirmed the lawsuit through a filing with the Taiwan Stock Exchange (China), and affirmed that the lawsuit "has no significant impact" on the company.

https cms image bucket production ap northeast 1 a7d2.s3.ap northeast 1.amazonaws.com images 1 2 8 4 47994821 1 eng GB 2021 08 27T125356Z_1705751089_RC25YL9MX21J_RTRMADP_3_CHINA REGULATION CLOUD.jpg copy.jpg
Huawei sues MediaTek for patent infringement. Photo: Nikkei Asia

Meanwhile, a source from YicaiGlobal said MediaTek said the royalty amount Huawei was demanding was too high. "MediaTek disagrees with Huawei on the amount of money to be paid for each patent. The outcome depends on Huawei's stance and whether the Shenzhen-based company intends to settle," the source said.

This is also the first time Huawei has sued a chipmaker, rather than a phone maker. If successful, the lawsuit could set a worrying precedent for component makers.

Tom's Hardware reports that MediaTek has many customers based in mainland China, so if it fails to reach a settlement and is banned from selling, the mobile chip maker could suffer heavy losses.

Counterpoint Research data shows that MediaTek is the world's leading mobile chip supplier, with a market share of about 40% in the first quarter of 2024, higher than Qualcomm and Apple. Its customers include phone makers such as Samsung, Oppo, Sony, Vivo and Xiaomi, and Huawei before 2020.

Meanwhile, Huawei currently holds many standard essential patents (SEPs), which play an important role in wireless communication standards. For example, the group owns 20% of the world's 5G-related patents.

Since 2021, the Chinese telecom company has been trying to collect royalties through licensing agreements with many European car manufacturers such as BMW, Mercedes Benz, VAG. In 2022, Huawei earned $ 560 million from patent royalties. About 200 companies in the world, such as Amazon, Samsung, Oppo currently have to pay to use Huawei technology.

Before MediaTek, Huawei sued T-Mobile in 2014, Samsung in 2016, and Verizon in 2020 over cellular connectivity patents. In 2022, the Chinese company continued to sue Amazon and Netgear over the use of Wi-Fi 6 and Wi-Fi 5 patents.

(Synthetic)

Huawei was once unable to produce a 5G phone on its own . Richard Yu Chengdong, a senior executive of Huawei, said the group faced 'extremely difficult' times when it was blacklisted by Washington.