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SAN FRANCISCO – Qualcomm called its $ 44 billion deal to buy NXP Semiconductors after Chinese regulators did not rule out the transaction between Washington and Beijing.
scrapped, assuming no last minute by Chinese authorities. The official cancellation was announced by NXP, which said it was terminated on Thursday. NXP said it would receive a $ 2 billion termination fee from Qualcomm as a result.
The transaction failed after a series of trump administration, including tariffs on numerous Chinese goods, and retaliatory measures from China.
Trade China had said it was going to be affected by the approval of the deal to gain negotiating leverage. Eight other jurisdictions, including the United States, had already approved Qualcomm's purchase of the Dutch chip maker. China was the exception,
The developments followed by President Trump to help Qualcomm earlier this year. In March, he blocked a $ 117 billion hostile takeover bid for Qualcomm by a rival chip maker, Broadcom, after a federal committee said an acquisition would reduce research spending on national security.
The formal deadline for
Steve Mollenkopf, Qualcomm's chief executive,
"We weighed that risk against the likelihood. of a current geopolitical environment, which we did not believe was a high-probability outcome in the near future, "he said during a conference call with analysts on Wednesday afternoon. Qualcomm reported that the results are good for the future (19659002) speed Qualcomm 's expansion into chips for cars, mobile payments and other applications. The company has said it has plans to buy it back to $ 30 billion from its stock price.
Qualcomm gets the most out of it.
This unusual business model has a number of features, such as that of a manufacturer or a manufacturer, and is generally used in the United States. Mr Mollenkopf reported that he had received a $ 500 million payment. Qualcomm has not disclosed the identity of the company, but analysts believe it is China 's Huawei
Mr. Mollenkopf's go-it-alone strategy rests in large part on 5G, the next generation of cellular technology. Qualcomm predicts that 5G will have many uses beyond increasing the speed of smartphones, including car-to-car communications to improve safety, virtual reality goggles and wireless alternatives for home internet service.
Qualcomm built a lucrative head start over rivals in delivering The company believes it has a comparable technology edge in 5G, which poses technical challenges that include potentially relying on higher broadcast frequencies never used previously in cellular networks.
The company said it was rapidly overcoming those obstacles, paving the way for some 5G services in the first half of 2019. Qualcomm engineers recently showed a software simulation that a typical 5G user in San Francisco would get a 17-fold increase in average download speeds.
"With every passing week, carriers around the world are announcing an expansion of their 5 G rollouts, "Mr. Mollenkopf said.
But some analysts questioned the strength of demand for 5G services as well as Qualcomm's lead over rivals. Intel, for example, has been successfully installed in the market. Apple's smartphones and has its own 5G advances. Qualcomm announced Wednesday that it expected Apple to use competing chips for its next iPhones.
Amid the challenges, Qualcomm said its core business was improving. The company reported Wednesday that quarterly net income increased 41 percent on a 4 percent rise in revenue.
Besides chips for smartphones, Qualcomm has said it has a backlog of orders from chips used in cars and other non-phone applications totaling $ 5 billion , up $ 2 billion from January.
Follow Don Clark on Twitter: @ donal888 .
Raymond Zhong contributed reporting from Beijing.
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