China on Friday announced an antitrust probe into US chipmaker Qualcomm over its planned acquisition of Israeli tech firm Autotalks, according to the country’s market regulator.
China’s State Administration for Market Regulation said the probe would look at whether Qualcomm violated China’s antitrust law by not lawfully declaring some details in its acquisition of the Israeli chip designer.
Shares Tumble
Qualcomm’s shares fell more than 5% after US President Donald Trump also threatened to hike tariffs against China and cancel a planned meeting with President Xi Jinping.
Companies in both countries are walking a tightrope amid the US and China’s tussle for a lead in the intense artificial intelligence race, where semiconductor trade has become a flashpoint.
Qualcomm completed the Autotalks deal in June and integrated V2X technology into its Snapdragon car stack just as China is standardizing vehicle-to-everything communication across pilot regions by 2026, Carthage Capital founder and managing partner Stephen Wu said.
“China could have penalized Qualcomm as a “no-harm” jumping the gun penalty, but they instead may choose a higher sanction. That combination signals pressure on US chip and auto supply chains,” Wu added.
China, US Trade Tensions
San Diego-based Qualcomm said in June it had finalised the deal for Autotalks, which makes communications chips to help prevent car crashes, without disclosing the size, or how it had resolved earlier sticking points.
Qualcomm had said in 2024 it would drop the bid for Autotalks after it failed to get regulatory approvals in a timely manner.
Qualcomm and Autotalks did not immediately respond to Reuters’ requests for comment on the Chinese probe.
In 2015, the major supplier of mobile phone chips paid a $975 million fine to resolve a Chinese antitrust case.
Scrutiny On US Companies
The latest investigation comes after Beijing last month accused US AI chip maker Nvidia of violating China’s anti-monopoly law.
“The investigation adds to broader regulatory scrutiny of US chipmakers in China,” Equisights Research analyst Parth Talsania said.
“With Qualcomm deriving a notable portion of revenue from Chinese handset and automotive customers, we believe the announcement amplifies existing investor caution around geopolitical and regulatory risk,” Talsania added.
Qualcomm derived 46% of its revenue in its fiscal 2024 from customers with headquarters in China.
Both probes could heighten tensions between China and the US at a time when they appear to be struggling to move beyond a trade tariff truce.
(With inputs from Reuters)
