South Korea’s antitrust regulator slapped a record 1.03 trillion won (US$853 million) fine on Qualcomm Inc for violating antitrust laws, the latest in a string of government actions that threaten the US chipmaker’s most profitable business.
The South Korean Fair Trade Commission (KFTC) said yesterday that the company licensed its key patents only to smartphone makers and did not properly negotiate the terms of its licenses. The agency also said Qualcomm coerced its customers into signing patent license contracts when selling its chips used in phones in the nation and it did not fairly pay for the use of patents held by other smartphone makers.
The decision from the home country of Samsung Electronics Co adds to investor concern that the San Diego-based chipmaker, which is also the subject of investigations in the US and Europe, might struggle to defend its lucrative licensing business.
Qualcomm gets the majority of its profit — US$6.5 billion the past financial year — from selling the right to use technology that is fundamental to all modern phone systems.
Qualcomm, calling the decision “unprecedented and insupportable,” said it would appeal the decision in the South Korean High Court.
The ruling does not go into effect immediately and Qualcomm would seek a stay from the courts while it appeals, Qualcomm general counsel Don Rosenberg said.
“The KFTC ruling will not just benefit local handset makers, but other global chipset makers too, so today’s ruling from the commission seems a bit broader and stronger than that of China last year,” SU Intellectual Property patent lawyer Jung Dong-joon said. “Qualcomm sales accounts for about 20 percent in the [South] Korean market and that’s a significant market for Qualcomm.”
For Samsung, the world’s biggest phone maker, and LG Electronics Inc, the ruling opens up the possibility they might be able to pay lower rates to Qualcomm.
When Qualcomm settled a probe by Chinese regulators last year, it accepted a lower rate charged on phones sold in that nation.
Samsung Electronics is Qualcomm’s second-largest customer, accounting for about 11 percent of its sales, according Bloomberg supply chain analysis.
The US company also designs and sells chips that are the main components in smartphones.
“Qualcomm Inc, a holder of standard-essential patents as well as a monopolistic service provider of modem chips from manufacturing to sales, has violated its agreement to license patents on fair reasonable and non-discriminatory terms, known as FRAND,” the commission said in a statement.
Qualcomm offers the rights to use all of its standard-essential patents, some of which cover the core technology behind modern wireless systems, in a combined package. Some of those inventions are used in industry standards.
Aside from the fine, the commission wants Qualcomm to let chipmakers access its key patents and refrain from imposing unfair conditions on customers when signing contracts.
The agency also said Qualcomm should make standard-essential patents available for separate licensing rather than bundling them with chip sales and the US company should accord greater value to other companies’ patents when accounting for them in cross-licensing agreements.
As in other cases that Qualcomm has won, the company expects the courts to side with it because its licensing business follows industry practices that have been in place for decades, Rosenberg said.
Profits from licensing fees are crucial to funding the firm’s industry-leading research and development efforts and maintaining Qualcomm’s competitive edge, he said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the