U.S. Chipmaker to Help Chinese Smartphone Makers to Sell Overseas

Published Date : Apr 27, 2015

The U.S. chip maker for smartphones, Qualcomm Inc., has set up a unit to help the Chinese smartphone manufacturers to sell overseas. The company is trying to build strong business relations with China when the country is trying to reduce its dependence on foreign chip makers. Though Chinese smartphone manufacturers contribute to about half of the company’s overall revenue, things have not been really well for Qualcomm in China. 

Qualcomm generates majority of its revenue through licensing its wireless patents. After an allegation by Edward Snowden, the U.S. government contractor, that in the pretense of providing technological help, Washington has been spying on other nations, China turned suspicious and this led to an investigation by Chinese antitrust authorities on Qualcomm’s business model of licensing its wireless patents. After paying US$975 million as antitrust fine, the chip maker wants to win back the trust of the Chinese smartphone makers who had alleged that the U.S. company was pricing its technology unfairly. 

The company’s move is targeted to the large Chinese companies such as Huawei Technologies Co. and Xiaomi Corp., as well as the smaller companies in the nation. The need to sell chips to the Chinese smartphone manufacturers is also important for Qualcomm in terms of revenue as the big players such as Samsung Electronics Co. and Apple Inc. have started using their own chips wherever possible, theryby affecting the profits of Qualcomm. 

Jeff Lorbeck, senior vice president of Qualcomm China , mentioned that his company is helping the Chinese customers to export out of China. Qualcomm has allocated US$150 million for investments in Chinese startups and has entered into partnerships with local semiconductor foundries.