By Li Hongmei
Qualcomm, the world's largest smartphone chipmaker, is facing an anti-trust investigation by China's National Development and Reform Commission (NDRC), reports the Chinese-language website of the China Economic Net.
The NDRC launched the anti-monopoly investigation of Qualcomm on Nov. 25. Neither the commission nor the company revealed why the chipmaker was placed under the probe, however the US-based chipmaker said it will work with the NDRC during the investigation.
A former Qualcomm executive said that the investigation may have come after negotiations between Qualcomm and Chinese mobile phone makers reached a stalemate over the patent authorization of 4G chips, where the American company had adopted a tough stance.
Insiders say that Qualcomm's LED patents in the 4G area indicate that Chinese mobile phone manufacturers and telecom carriers currently have to pay Qualcomm fees on the sale of every 4G phone.
To attract more users to buy 4G phones, mobile phone operators are trying to reduce the price of 4G phones by subsidizing the purchases. However, if Qualcomm - the leading 4G patent holder - requests a higher authorization fee, it will be difficult for operators to lower the costs generated by the phones.
The former Qualcomm executive said that four years ago, almost all phone suppliers, including Samsung, Apple, HTC and Huawei, were Qualcomm's clients in China. Qualcomm remains the main chip supplier for phone manufacturers at present, but it has lost some steam.
In addition to the antitrust probe, the US-based semiconductor firm is also facing layoffs worldwide and fierce competition from Chinese chipmakers.
Qualcomm Greater China announced on Nov. 25 a series of changes to personnel of its Qualcomm Reference Design (QRD) business - it marks the first large-scale personnel change after the company's global layoffs in October this year.
The company attributed the October layoffs to cost control as complex market demand may have a certain influence on its income. According to the latest quarterly financial reports, Qualcomm received sales of US$6.48 billion, up by 33% year-on-year and up by 4% compared to the previous quarter.
