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Qualcomm CEO says still in the dark on China antitrust probe

Paul Jacobs, chairman and CEO of Qualcomm, speaks during a panel discussion at the 2014 International Consumer Electronics Show (CES) in Las
Paul Jacobs, chairman and CEO of Qualcomm, speaks during a panel discussion at the 2014 International Consumer Electronics Show (CES) in Las

By Noel Randewich

LAS VEGAS (Reuters) - Qualcomm's CEO Paul Jacobs said on Wednesday that the U.S. mobile chipmaker still has not been notified about why it has come under antitrust scrutiny in China since late last year.

In November, Qualcomm announced that China's National Development and Reform Commission had launched an antitrust probe into the company. The chipmaker said it was unaware of any possible violations.

"We really don't know yet," Jacobs told Reuters in an interview at the Consumer Electronics Show in Las Vegas. He added that it is not unusual for authorities in various countries not to disclose reasons for their antitrust probes.

Qualcomm has since handed over requested documents to the NDRC.

The NDRC has launched nearly 20 pricing-related probes of domestic and foreign firms in the last three years, according to official media and research published by law firms.

In December, state media quoted a senior official at the NDRC saying the regulator had "substantial evidence" against the chipmaker.

Some experts have suggested China's government may be seeking leverage in royalty negotiations or moving to support local suppliers trying to compete with Qualcomm, the global leader in 4G technology, also known as Long-Term Evolution (LTE).

In the last few months, organizations affiliated with the Chinese government spent nearly $3 billion to buy Chinese mobile chipmakers Spreadtrum Communications Inc and RDA Microelectronics Inc. Both companies have technology that competes with Qualcomm's.

"We're good with the operators because we help the operators out a lot," Jacobs said. "China has a couple of chipset manufacturers that just got bought by a government university so there are all sorts of dynamics going on."

Qualcomm, the world's biggest maker of cellphone chips, sees China as a key market as growth in smartphones shifts away from the United States to developing countries. China Mobile has been preparing to upgrade to high-speed networks using technology developed by Qualcomm.

"I wouldn't single out any particular company at this point but we definitely have friends and we definitely have companies that we know are more antagonistic," said Jacobs, who will step aside as Qualcomm's CEO in March. He will be replaced by Chief Operating Officer Steve Mollenkopf.

(Reporting by Noel Randewich; Editing by Edwina Gibbs)

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