Qualcomm is under attack for its dominant position in intellectual property for mobile chips. On Wednesday the US chipmaker was hit with a T$23.4bn (US$774m) fine by Taiwan’s Fair Trade Commission.
A lower-profile skirmish over chips for the forthcoming 5G standard could be more consequential, however. China is pushing for a bigger share in the design of the next generation of mobile data services. If it succeeds, Qualcomm will be hurt, equipment makers such as ZTE and Huawei will benefit and operators such as China Mobile will pay the bill.
The US chip group owns 12.5 per cent of patents essential for the current 4G standard, according to Jefferies. Qualcomm recorded royalty revenues of $4.4bn in the nine months to June. China is the largest mobile market — China Mobile alone has 873m customers — but the nation’s share of intellectual property has historically been small.