Qualcomm ‘Globalization’ Base to Win Back Chinese Tech Companies

American company Qualcomm Incorporated, the world’s largest producer of chips for smartphones, announced the launch of its “globalization” unit on Monday. The Shenzhen-based unit—designed to help Chinese mobile tech companies compete overseas—comes shortly after Qualcomm settled an antitrust lawsuit that resulted in a $975 million fine, the largest penalty the Chinese government has ever levied against a company (foreign or domestic).

In an effort to rebuild Qualcomm’s image across China (the market that contributes half of Qualcomm’s revenue), the globalization unit will welcome both large, well-known Chinese brands like Xiaomi Corp and Huawei Technologies Corp, and lesser-known companies and help them expand into overseas markets. In addition to the launch, Qualcomm announced Sunday that it would start a $150 million fund to invest in Chinese tech startups. It has also recently partnered with Chinese semiconductor foundries in Xiamen to help them develop their production processes.

In the suit, Qualcomm was suspected of monopolistic wireless patent licensing practices following complaints by Chinese customers. The settlement included a reduction of Qualcomm’s royalty rates on phones sold in China and the record-breaking fine, leading to to a 46 percent drop in Qualcomm’s second quarter profits. Qualcomm CEO Steve Mollenkopf said that since the settlement, more companies have been willing to sign licensing agreements, but sales to Chinese phone makers remain on the to-do list.

Jeff Lorbeck, senior vice president of Qualcomm China, said that the company is making efforts to be more transparent with its operations, and to educate Chinese stakeholders on the contributions Qualcomm has made to China’s technology industry.

(Photo by Kārlis Dambrāns via Flickr)

YOU'RE INVITED
Forecast 2025

Forecast 2025