- China launched an investigation into Qualcomm’s acquisition of V2X firm Autotalks
- Qualcomm said it is cooperating with Chinese officials
- The move comes as tensions rise over U.S.-China tech policy
Shares in Qualcomm were down about 4% today after China said it was investigating – of all things – the tech giant’s acquisition of Israeli vehicle-to-everything (V2X) firm Autotalks.
Qualcomm completed the acquisition of Autotalks back in June, but given the state of affairs between the U.S. and China, that is now part of China’s offensive to crack down on U.S. semiconductor companies.
According to multiple media reports, China’s State Administration of Market Regulation (SAMR) said that Qualcomm is suspected of violating the country’s anti-monopoly law in regards to its acquisition of Autotalks.
A Qualcomm spokesperson provided the following statement to Fierce: "We are fully cooperating with SAMR in this matter. Qualcomm is committed to supporting the development and growth of our customers and partners."
Qualcomm, which supplies its chips to Chinese smartphone companies like Xiaomi, isn’t the only chip firm being targeted. China also cited its anti-monopoly law in its investigation into Nvidia’s 2020 acquisition of Mellanox, a provider of network gear for data centers.
The Qualcomm investigation comes as China also announced it will start charging U.S. ships for docking at Chinese ports, a move that came in response to similar port fees the U.S. announced on Chinese ships, also set to go into effect on October 14.
Qualcomm’s ties to China
San Diego-based Qualcomm has been involved in the development of V2X technology for years as part of its plan to diversify beyond chips for phones.
"While the immediate financial penalty risk appears modest, this investigation underscores the ongoing regulatory vulnerability of U.S. semiconductor companies in China,” said CFRA Research analyst Angelo Zino in a Friday note for investors.
“Given China's strategic importance to Qualcomm’s business model (over 45% of sales), we note inherent risks. Yet we think China's strategy is to try to grab as much leverage as possible ahead of potential Trump-Xi meetings, suggesting geopolitical motivations beyond pure antitrust concerns," added Zino, who reiterated his “buy” rating on Qualcomm shares.
President Trump and Chinese leader Xi Jinping are expected to meet on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum, set to take place later this month in South Korea.