The Qualcomm logo on a smartphone displayed at the Mobile World Congress in Barcelona, Feb. 26. (Photo/CFP)
The National Development and Reform Commission (NDRC), China's main macroeconomic management agency, is said to have collected a substantial amount of evidence of price-fixing by global semiconductor giant Qualcomm, which faces potential fines of up to US$1.2 billion, reports the Chinese-language Beijing Times.
Last Friday, Qualcomm said it was continuing to cooperate with Chinese regulators with an antitrust probe launched last month, but stated that its operations were not in violation of the country's anti-monopoly laws.
However, Xu Kunlin, the general director of the department of price supervision at the NDRC, told the Beijing-based China Daily newspaper that the commission has obtained "substantial evidence" against Qualcomm, though he did not divulge further details of the investigation. Xu also said that the commission was going to strengthen its antitrust efforts in other areas by adding at least an extra 170 people to its price supervision enforcement teams.
Given that Qualcomm's total revenue totaled US$24.9 billion last financial year and that 49% of that amount was made from China, the company could potentially face fines of to up US$1.2 billion if it is found guilty of breaching anti-monopoly laws.
An industry insider told the Beijing Times that Qualcomm is being targeted by Chinese regulators possibly because of its dominant position regarding 4G wireless network patents, where it makes a large portion of its money every year.
Based on data from global market research firm Strategy Analytics, in the second quarter of this year Qualcomm held a 63% share of the cellular baseband processor market, which supplies most of the existing or upcoming 4G mobile phones.
Xu Kunlin 許昆林