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Qualcomm, Samsung patch up their relations

Feb 02,2018
Qualcomm announced Wednesday it renewed a global patent cross-licensing agreement covering mobile devices and communications infrastructure for wireless applications with Samsung Electronics for the sake of a long-term strategic partnership.

As part of the deal, the specifics of which are unknown, the world’s top smartphone producer will withdraw answers to a questionnaire it filed in Qualcomm’s appeal of a Korean antitrust agency decision in the Seoul High Court.

In December 2016, the Fair Trade Commission slapped an $854 million fine on the American chipmaker for having an “unfair” business model and forming a monopoly. Samsung has been one of the few companies that responded to a questionnaire by the FTC as part of its investigation. That may help Qualcomm’s appeal.

“Qualcomm has enjoyed a strong partnership with Samsung for many years, and we are pleased to further strengthen and extend our relationship through this amended cross-license agreement, alongside our continuing relationship as a key product supplier to Samsung,” said Qualcomm CEO Steve Mollenkopf in a statement.

The Wednesday deal comes after the two companies signed a licensing agreement covering both 3G and 4G networks in 2009 and Samsung agreed to pay $1.3 billion up front for use of Qualcomm’s patents. Alex Rogers, head of Qualcomm’s licensing division, said during an earnings call Wednesday that Samsung will continue to pay royalties on handset sales instead of combining the royalty agreement with its chip purchases.

Samsung, recently hailed as the world’s biggest chipmaker after taking the crown from Intel, is the first Korean tech firm to extend a cross-licensing agreement with Qualcomm. For Qualcomm, which has a range of mobile phone patents needed by phone manufacturers, Samsung is a crucial business partner responsible for more than 10 percent of its revenue.

Samsung is also known to be working with Qualcomm on the next-generation 5G wireless network, and the American company is preparing to launch 5G smartphones with Chinese smartphone vendors. The San Diego-based company is in a thorny position now. The European Commission on Jan. 24 imposed a $1.23 billion fine on it for abusing its dominant position in LTE baseband chipsets used in 4G mobile phones. The company said it would file an appeal. The American firm is also grappling with a hostile takeover bid from rival Broadcom.

BY SEO JI-EUN [seo.jieun@joongang.co.kr]