US-based chip designer Qualcomm Inc is by the end of next year to complete the first phase of a five-year US$700 million investment it pledged as part of an antitrust settlement with Taiwan, the Fair Trade Commission (FTC) said on Saturday.
Speaking to the Central News Agency, FTC Commissioner Hong Tsai-lung (洪財隆) said Qualcomm has submitted key performance indicators to the commission that would be used to assess whether it is meeting first-stage targets and its ability to complete the initial investment by the end of next year.
Hong said Qualcomm would consult with the commission as it pursues its investment plan in Taiwan.
He declined to share any financial terms or other details on Qualcomm’s first-stage investment, because the US company and the commission signed a non-disclosure agreement on the matter.
On Friday, the FTC and Qualcomm reached a settlement to resolve an antitrust dispute for a NT$2.73 billion (US$88.9 million) fine, sharply lower than the record NT$23.4 billion fine initially imposed by the commission in October last year.
The settlement was reached at the Intellectual Property Court, where Qualcomm filed an appeal against the commission’s initial fine.
Qualcomm had paid NT$2.73 billion to the commission in several installments up until the time of the settlement.
According to the deal, Qualcomm agreed not to claim the money it has paid to the commission and also committed to a five-year investment plan covering 5G collaboration, market expansion, start-up and university collaborations, and the creation of an operational and manufacturing engineering center in Taiwan.
Qualcomm has promised to brief the commission on the pledged investment process every six months, and the commission plans to have the Ministry of Economic Affairs and the Ministry of Science and Technology sit down with the company to work out investment details, Hong said, adding that the company is expected to release details of its investment step by step.
The commission has been criticized for accepting such a deep cut in the fine, but Hong said that the US$700 million pledged in investment would deliver far more benefits to the nation’s economic development than the uncollected portion of the fine.
Qualcomm confirmed the “mutually agreed settlement” in a statement on Friday.
In addition, the company agreed to ensure fair negotiations with local licensees, and would support research and commercial projects in Taiwan, it said.
Analysts said the deal was a “win-win” at a time when Taiwan wants to attract more foreign investment.
“It makes both parties look good,” Taiwan Institute of Economic Research (台灣經濟研究院) economist Gordon Sun (孫明德) said.
Chung-Hua Institution for Economic Research (中華經濟研究院) head economic researcher Liu Meng-chun (劉孟俊) said that through the settlement the government has maintained market order by getting Qualcomm to commit to fair trade.
Liu said Qualcomm’s promises to expand investment in Taiwan are also expected to attract its business partners to the nation and raise its domestic investment momentum.
To Qualcomm, which relies on Taiwanese companies to manufacture its designs, its relationships with firms, including Taiwan Semiconductor Manufacturing Co (台積電), are expected to become closer, he said.
Additional reporting by AFP
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