According to Nikkei Asia , Huawei's goal in this lawsuit is to collect royalties, which it will then reinvest in research and development. Additionally, this move is also a way for Huawei to showcase its technological capabilities to the world .

MediaTek confirmed the lawsuit through filings with the Taiwan Stock Exchange (China), while also stating that the lawsuit "does not significantly impact" 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, YicaiGlobal sources indicate that MediaTek claims the amount of royalties Huawei is demanding is too high. "MediaTek disagrees with Huawei on the amount to be paid for each patent. The outcome depends on Huawei's stance and whether the Shenzhen-based company intends to resolve the issue," the source said.

This also marks the first time Huawei has sued a chip manufacturer, rather than a phone company. If successful, the lawsuit could set a worrying precedent for component manufacturers.

According to Tom's Hardware , MediaTek has many customers with headquarters or factories located in mainland China. Therefore, if they cannot reach a satisfactory agreement and are subsequently banned from selling, the mobile chip manufacturer could suffer significant losses.

Data from Counterpoint Research shows that MediaTek is the world's leading mobile chip supplier, with a market share of approximately 40% in Q1 2024, higher than Qualcomm and Apple. Its customers include phone manufacturers such as Samsung, Oppo, Sony, Vivo, Xiaomi, and even Huawei before 2020.

Meanwhile, Huawei currently holds many essential standards (SEP) patents, which play a crucial role in wireless communication standards. For example, 20% of the world's 5G-related patents belong to this corporation.

Since 2021, the Chinese telecommunications company has been working to collect royalties through licensing agreements with numerous European automakers such as BMW, Mercedes-Benz, and VAG. In 2022, Huawei earned $560 million from patent royalties. Approximately 200 companies worldwide, including Amazon, Samsung, and Oppo, currently pay to use Huawei's technology.

Prior to MediaTek, Huawei had sued T-Mobile in 2014, Samsung in 2016, and Verizon in 2020 over mobile connectivity patents. In 2022, the Chinese company further sued Amazon and Netgear regarding the use of Wi-Fi 6 and Wi-Fi 5 patents.

(Synthetic)

Huawei was once unable to manufacture a 5G phone on its own . Richard Yu Chengdong, a senior executive at Huawei, said the company faced "extremely difficult" times when it was placed on Washington's blacklist of sanctions.