China seen giving close scrutiny to merger of Qualcomm, Broadcom

Updated 2017-11-08 10:35:04 Global Times/Agencies

A potential mega-merger between chipmaker Broadcom and U.S. rival Qualcomm Inc is likely to face stern scrutiny in China, antitrust lawyers said, amid a strategic push by the Chinese government into semiconductors.

Broadcom made an unsolicited 3 billion bid for Qualcomm on Monday, aimed at creating a 0-billion-plus behemoth that could reshape the industry at the heart of mobile phone hardware.

But Chinese regulatory approval could be a hold-up.

China and the US have sparred over technology deals, including in chips, with the Committee on Foreign Investment in the United States (CFIUS) knocking back a number of takeovers involving Chinese companies this year.

The merger would face a lengthy review from the anti-monopoly unit of China's Ministry of Commerce (MOFCOM), due to strategic concerns, the huge size of the deal and because Qualcomm has come under fire before in the country over competition concerns.

"This is a critical industry for China and Qualcomm has been fined by the MOFCOM before so it's on its radar," said Wendy Yan, a Shanghai-based partner at law firm Faegre Baker Daniels.

Qualcomm agreed to pay a record fine of 5 million in China in 2015 to end a probe into anti-competitive practices related to so-called double dipping by billing Chinese customers patent royalty fees in addition to charging for the chips.

China is making a major push to develop its own semiconductor industry under local champions such as Beijing-based Tsinghua Unigroup and Fujian Grand Chip Investment Fund to help cut reliance on global operators including Qualcomm, Samsung Electronics Co and Intel Corp.

"The [MOFCOM] will consider industry security for the whole country, as the semiconductor industry has strategic importance to China," a second Shanghai-based antitrust lawyer said.

He asked not to be identified because Qualcomm was a client of his firm.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58October 21 2018 04:59:09

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16October 21 2018 04:59:09

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18October 21 2018 04:59:09

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

China World Business Sports Showbiz Audio
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
China World Fun Travel Entertainment Sports
Beijing Shanghai Guangzhou
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords