Qualcomm Hopes ZTE Deal "Means Something Good" For NXP Bid

Qualcomm Chief Executive Officer Steven Mollenkopf on Thursday said the renegotiated trade settlement between the U.S. Commerce Department and China's ZTE may help accelerate the approval of the San Diego, California-based chipmaker's bid for Dutch NXP Semiconductors. "I hope it means something good to us, but we are really focused more on our individual application," the executive said Thursday at The Deal's corporate governance conference held in New York City. Qualcomm's acquisition of NXP was first announced in late 2016, with Beijing's antitrust watchdog being the last regulator that has yet to greenlight it. In the meantime, Qualcomm's bid was extended on numerous occasions and increased as a defense mechanism against Broadcom's hostile takeover attempt which was ultimately stopped by President Trump.

Insiders recently claimed the approval of the Qualcomm-NXP deal hinges on the fate of ZTE whose operations were crippled by the Commerce Department in April after the regulator hit it with a denial order preventing it from purchasing or licensing any American technologies over a seven-year period. The penalty issued in response to ZTE's non-compliance with a 2017 settlement over violations of trade sanctions imposed on North Korea and Iran was replaced with another $1 billion fine and a broad range of other concessions several days back, with sources now claiming that China, the majority owner of ZTE, may return the favor and approve Qualcomm's bid in the near future as part of wider trade talks with Washington.

China has jurisdiction over the consolidation as it's the world's largest semiconductor importer and both Qualcomm and NXP operate in the Far Eastern country on a significant scale. The tie-up would allow Qualcomm to diversify and move beyond mobile and wireless technologies, two areas where its profit margins are likely to be challenged in the near future due to a number of disputes over its patent licensing practices which some of its high-profile clients such as Apple deem unfair. NXP is unlikely to step away from the merger even if the review process drags on to the point that it isn't contractually obliged to stick with Qualcomm any longer.

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Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]
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