Qualcomm May Shift Some Chipmaking to China
From U.S., Taiwan
By Michael Forsythe
Beijing, Jan. 9 (Bloomberg) -- Qualcomm Inc., whose patented technology is
used in about 100 million mobile phones, will start making chips for handsets
in China, the world's largest cellular phone market by subscribers.
San Diego-based Qualcomm employs outside manufacturers in the U.S. and
Taiwan to make chips with its technology which helps carry more calls over
available frequencies than the rival European technology more common in
China. The company may shift some production to plants in China owned by
companies such as Motorola Inc., Irwin Jacobs, Qualcomm's chief executive,
said.
``We are talking with possible companies who will set up manufacturing
capability here in China,'' Jacobs told reporters in Beijing. ``When that's
available, we will certainly make use of it.''
Expanding sales in China, with 140 million mobile-phone users, may help
boost Qualcomm's earnings. In fiscal 2001, the company's profit, excluding
acquisition costs and other items, fell 1.8 percent to $788.9 million.
Qualcomm's China operations will be profitable in the next fiscal year, Jacobs
said.
Shares in the company have fallen 34 percent in the past year, while the
Nasdaq Composite Index has declined 16 percent.
Unicom
China United Telecommunications Corp., the country's second- largest
wireless operator, yesterday began operating a nationwide phone network
using Qualcomm's patented code division multiple access technology, or
CDMA. Qualcomm earns royalties from handset makers and network
equipment manufacturers as well as revenue from sales of its chipsets.
The Unicom network has a capacity for 15.2 million users, which is set to
expand to 50 million by 2003.
China's government plans to establish the country as a major semiconductor
manufacturer. Shougang Group Corp., a steelmaker, said it will sign a $800
million agreement with a foreign chipmaker to produce semiconductors in
China, according to the state-run China Daily newspaper. |
