Qualcomm Comes Under Scrutiny From South Korea

Reports of the antitrust investigation comes days after the chip maker agreed to pay a $975 million fine to end a probe in China.

Qualcomm probe

Qualcomm's issues with regulators in Asia may not be over yet.

Three days after Qualcomm executives announced the company will pay a $975 million fine as part of a settlement over an antitrust investigation in China, South Korean regulators reportedly are considering an investigation to see if Qualcomm has abused its dominant position in the mobile chip market.

Quoting unnamed sources, several new outlets—including the Wall Street Journal and Reuters—reported that South Korea's Fair Trade Commission is investigating Qualcomm over antitrust concerns. Qualcomm, which is the world's largest supplier of processors for mobile devices like smartphones and tablets—is facing similar investigations in the United States and Europe.

Qualcomm officials have not responded to media requests for comment on the reports regarding the South Korea probe.

According to reports, the investigation may focus the royalty fees Qualcomm collects on its patents. South Korean regulators plan to send inquiries to such mobile phone makers as Samsung and competitors, including Intel, according to Reuters. The news organization last year reported that Chinese regulators met with those in South Korean during their investigation of Qualcomm.

Qualcomm executives said Feb. 9 that they were relieved to reach a settlement with China's National Development and Reform Commission (NDRC) that ended an investigation that had been a drag on the chip maker's financials. In its last fiscal year, Qualcomm generated more than half of its revenues from its China business.

CEO Steve Mollenkopf and other executives said they disagreed with the NDRC's findings that Qualcomm had violated the country's antitrust laws. However, they said the company would not pursue the case after reaching the settlement, which not only included the fine but also an agreement by Qualcomm to offer separate patent royalties for its 3G and 4G technologies, as well as reduce royalties on some patents sold in China.

"We are pleased that the resolution has removed the uncertainty surrounding our business in China, and we will now focus our full attention and resources on supporting our customers and partners in China and pursuing the many opportunities ahead," Mollenkopf said in a statement after the settlement was announced.

The latest investigation is the not the first time Qualcomm has crossed paths with South Korean regulators. In 2009, the country fined Qualcomm $235 million for antitrust issues surrounding the chips it sold to South Korean device makers.

It's been a difficult few months for Qualcomm. Along with the investigations in China and elsewhere, the company in December announced it was cutting 600 jobs. That was followed by reports that major customer Samsung decided that its upcoming Galaxy S6 will use Samsung's own chip rather than Qualcomm's new 64-bit Snapdragon 810 due to overheating issues. Mollenkopf, during a conference call Jan. 28, said there were more than 60 device designs that will use the Snapdragon 810, though he admitted that a top customer—he declined to say which one—had decided not to use Qualcomm chip.

The CEO also said that with the next Snapdragon chip—the 820—Qualcomm will return to leveraging its own custom 64-bit ARM-based CPU architecture, as it has done in the past. The company had used an ARM CPU for the Snapdragon 810 to accelerate Qualcomm's use of a 64-bit chip.