Huawei accused chipmaker MediaTek of patent infringement and this move is said to be to collect copyright licensing fees.
According to Nikkei Asia, Huawei Technologies filed a petition with a court in China and MediaTek later confirmed through a filing with the Taiwan Stock Exchange on July 19. The two sides have not disclosed relevant information, except that MediaTek affirmed that the lawsuit "will not have a significant impact" on the company.
Nikkei's source said that Huawei's goal in this lawsuit is to collect copyright fees, thereby reinvesting in research and development activities. In addition, the Chinese electronics company also wants to show off its technological capabilities to the world.
Meanwhile, YicaiGlobal quoted a source close to MediaTek that the chip company assessed the amount Huawei requested as too high. "MediaTek disagrees with Huawei on the amount to pay for each patent. The outcome depends on Huawei's stance and whether the Shenzhen-based company intends to settle or not," the source said.
This site also said this is the first time Huawei has sued a chip manufacturer, instead of a phone company. If successful, future licensing fees could become a new problem for component manufacturers.
According to Tom's Hardware, many of MediaTek's customers are companies headquartered in China or have factories here. If a settlement is not reached and the sale is banned, the company may suffer heavy losses.
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, according to statistics from analyst firm Counterpoint Research. Its customers include phone manufacturers such as Samsung, Oppo, Sony, Vivo and Xiaomi and even Huawei before 2020.
Meanwhile, Huawei currently holds many standard essential patents (SEPs), which play an important role in wireless communication standards. For example, 20% of the world's 5G-related patents currently belong to this unit.
Since 2021, the Chinese telecommunications company has been trying to collect royalties through licensing agreements with many European automakers such as BMW, Mercedes Benz, and VAG. In 2022, Huawei earns 560 million USD from patent rights. About 200 companies around the world, such as Amazon, Samsung, and 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 mobile connection patents. In 2022, the Chinese company continues to sue Amazon and Netgear regarding the right to use Wi-Fi 6 and Wi-Fi 5 patents.