Posted November. 07, 2017 08:01,
Updated November. 07, 2017 09:07
“One does all the work and another takes the credit.” Qualcomm is a company that takes all the credit in the information communication technology (ICT) industry. The company has source technology in the CDMA area, with which it supplies semiconductor chips to smartphone manufacturers including Samsung Electronics and Apple and take 5 percent of product sales as a patent fee. The more smartphones are sold, the higher the patent fee for Qualcomm becomes.
Qualcomm is notorious for threatening clients that they might not supply chips to get better deals when signing a license agreement. Global authorities are trying to put a brake on this practice. South Korea imposed a fine of 1.3 trillion won, and China also charged the company 6.088 billion yuan. The United States and the European Union are also investigating the company’s unfair business practices. Meanwhile, it is projected Broadcom Corporation that ranks 4th in sales will sound out its intention to take over Qualcomm, which ranks 3rd, at 100 billion dollars. Considering the current crisis Qualcomm is facing, the deal is likely to be sealed.
As the past several years have seen a series of buyouts, the semiconductor industry is in rough water. Qualcomm, which acquired Dutch semiconductor business NXP at 47 billion dollars last year, has now become a target of acquisition. Singaporean company Avago Technologies that took over U.S.-based Broadcom at 37 billion dollars in 2015 and changed its name is now targeting Qualcomm. Softbank in Japan bought out Arm Holdings, a British semiconductor design company, at 32 billion dollars last year. China is trying to rise high as well, by creating a “National IC Industry Investment Fund” and investing more than 23 billion dollars.
History tells us that we cannot survive without change. Intel was the first to produce DRAM memory chips in 1970, but lost market dominance to Japan. It resolutely changed the focus of the company to non-memory models, and has now become the No. 1 CPU supplier that accounts for 70 percent of the supply market. On the other hand, Japan’s memory chip industry was not able to ditch its obsession over “high-cost products with excessively high quality” even in the era of mass production before eventually going belly up altogether. This is why the Korean semiconductor industry needs to seek change even though it is continuing to record all-time high sales.