US Chipmaker to Strengthen Collaboration With Korean Handset Vendors
By Kim Yoo-chul
Mobile-phone technology firm Qualcomm is planning to establish a research and development (R&D) center in South Korea as it looks to tap local engineering talent to advance its wireless technologies.
In a news conference in Seoul Monday, Qualcomm CEO Paul Jacobs also confirmed a $4 million investment in local chipmaker, PULSUS Technologies, through its venture capital arm, Qualcomm Ventures.
"I just want to say it's really the first step for Qualcomm's long-term plan to invest in new companies, here," Jacobs said.
PULSUS Technologies is a developer of chips that transform audio signals and allow them to be amplified digitally.
"We are in the process of searching for the next (investment) steps looking for promising technologies. Although Qualcomm has plans to make additional investments, we still haven't fixed the targets and the number of local companies," Nagraj Kashyap, vice president of Qualcomm Ventures, told reporters.
The San Diego-based chipmaker will also continue with its legal efforts to challenge the Korea Fair Trade Commission's decision to slap the company with a record 260 billion won (about $208 million) fine for violating the country's fair competition rules, Jacobs said.
In announcing the penalty last July, the fair trade watchdog claimed that Qualcomm unlawfully demanded higher royalties from handset vendors using the products of rival chipmakers.
The fine was larger than the 32.5 billion won penalty the KFTC slapped on U.S. software giant, Microsoft, in 2006 for anti-competitive practices.
Qualcomm immediately protested the fine, saying that the KFTC decision was "regrettable" and defended its business practices as "legal, appropriate and competition-friendly."
"We do disagree. The legal process will continue," Jacobs said.
Qualcomm is talking with Korean technology companies and academic institutions over its planned R&D center, which will be its second center in Asia following one opened in China, company officials said.
Industry watchers here believe the research center will allow Qualcomm to strengthen its collaboration with handset vendors and mobile-phone operators in developing chip technologies for smartphones and other advanced mobile devices.
Jacobs said the primary focus of the Korean R&D center will be next-generation mobile communications technology, including multimedia and other mobile applications.
"The R&D center will support studies in mobile multimedia-related areas where South Korea has an edge for first projects, as well as modems, multimedia, chips, displays and sensors," Jacobs said.
When asked about detailed plans for the center, such as size or timing of the opening, Jacobs said the company wasn't ready to talk about the details.
"We have specific projects underway. But it's hard to say. Qualcomm doesn't have a fixed number for people and investment, yet," Jacobs said, adding that he expects Korean mobile-phone manufacturers, led by Samsung Electronics and LG Electronics, to show interest in joint technology development.
"The proposals will come in," he said, without elaborating further.
Apple is currently dominating the premium mobile-phone market with its do-it-all iPhone but Jacobs said the technology gap between the U.S. electronics giant and Korean handset vendors was closing.
"The R&D and investment we are doing now is focused on fundamental components. Apple did something different. But if you look at the products, you can see that things can happen very quickly," he said.
Samsung and LG, the world's second- and third-biggest handset vendors, respectively, are known to be involved in serious discussions with Qualcomm over advancing technology in key areas.
"Qualcomm is reviewing a sizable number of co-projects with South Korean companies including Samsung and LG Electronics," Cha Young-koo, president of Qualcomm Korea, said.
A Samsung spokesman declined to comment on the claims.
Qualcomm is the creator of code division multiple access (CDMA) technology, which has been the industry standard for mobile communications in Korea and eventually provided the core technology for WCDMA, the global standard for third-generation (3G) communications.
It is estimated that more than 99 percent of mobile phones used in Korea are embedded with Qualcomm chips.
The U.S. technology provider is a key supplier of such chips to Samsung, LG and Pantech.