Qualcomm has come under antitrust investigation in China. Shares fell

Chinese regulators have launched an antitrust probe into chip and communications technology developer Qualcomm's deal to buy Israeli semiconductor company Autotalks. The investigation intensifies pressure on the company, for which the Chinese market remains one of the key sources of revenue - almost half of Qualcomm's revenue in fiscal 2024 came from China.

China has launched a review of Qualcomm's acquisition of Autotalks, Bloomberg reports. The State Administration for Market Regulation (SAMR) said that it intends to check possible violations of antitrust laws in this deal.

Qualcomm acquired Autotalks earlier this year. The amount of the deal was not disclosed.

Qualcomm shares were falling by almost 2% at the beginning of trading in New York. Since the beginning of the year, the company's securities have added only about 8%, lagging behind the broad market - the S&P 500 index rose by almost 15%.

The announcement of the investigation also led to a fall in shares of British chip developer Alphawave IP Group - Qualcomm is in the process of buying this company in a $2.4 billion deal earlier this year, writes Bloomberg. Quotes of Alphawave IP Group were down about 6.5% in London, but partially recovered the decline.

Beijing is focusing on Qualcomm, whose technology plays a key role in the production of smartphones and networking equipment, amid preparations for talks between U.S. President Donald Trump and his Chinese counterpart Xi Jinping. Both countries are trying to strengthen their positions before the expiration of the trade truce - even at the cost of a possible escalation of tensions, Bloomberg writes.

Qualcomm is heavily dependent on the Chinese market and is one of the most vulnerable U.S. companies there, WSJ notes. Nearly half of its revenue for fiscal 2024 came from China, the latest data available, the newspaper said. In a recent filing, the company noted that "a substantial portion of its business is concentrated in China, and the risks of that concentration are heightened by trade and political tensions between the U.S. and China."

In addition to Qualcomm, Chinese regulators a month ago said they had launched an investigation into Nvidia's 2020 deal to buy network equipment maker Mellanox. The announcement of the investigation came as representatives from Beijing and Washington argued over trade and other topics during wide-ranging talks in Madrid, the agency notes.

The day before, it became known that China had also tightened export controls on rare earth elements and related technologies. These materials are key to high-tech industries ranging from automotive and defense to semiconductor production, CNBC reported.

Beijing on Oct. 9 also said it would introduce an export licensing system for certain types of lithium batteries and the equipment and materials used to produce them, the WSJ wrote.

The next day, Chinese authorities announced their intention to impose a special port fee on U.S. ships calling at Chinese ports in response to the Trump administration's decision to impose similar fees on Chinese ships, the newspaper reported.

Beijing is using government investigations into U.S. companies as a tool to pressure Washington, which has consistently imposed more export restrictions and duties on Chinese goods over the past few years, the WSJ notes.

According to MarketWatch, the analyst consensus on Qualcomm stock remains moderately positive. Of the 38 analysts tracking the company's securities, 19 recommend buying (Buy and Overweight), 18 recommend holding (Hold) and only one recommends selling (Sell).

This article was AI-translated and verified by a human editor