ID :
104027
Tue, 02/02/2010 - 10:55
Auther :

(LEAD) Qualcomm's announcement of $4 mln investment plan met with skepticism


(ATTN: RECASTS lead, headline; UPDATES and TRIMS throughout with comments)
By Lee Youkyung
SEOUL, Feb. 1 (Yonhap) -- South Korean market watchers reacted with skepticism
and confusion to an announcement by the chief of the world's largest mobile phone
chipmaker Qualcomm Inc. on Monday of a US$4 million investment plan and the
launch of a research and development center.

Qualcomm CEO Paul Jacobs said that the San Diego-based company will provide the
funds to Pulsus Technologies, a South Korean maker of digital audio chips. It
will also establish the center to collaborate with other South Korean companies
and academic institutions on mobile technology.
It declined to provide details, however, on the structure of the investment plan
for the research center.
"We don't have a fixed number -- people or investment -- it will be driven
actually by the number of projects that we are bringing out," Jacobs told a press
conference in Seoul.
Market watchers describe the announcement as very unusual coming from a chief
executive officer, adding that it has left many questions.
"It is very unusual for a foreign company to announce the launch of a R&D center
without specifics on projects, structure, or investment size," said an official
with close knowledge of South Korea's telecom industry, who declined to be
identified. "It may be trying to calm unfavorable public opinion that has been
exacerbated by Qualcomm's unfair business practices."
Last July, South Korea's Fair Trade Commission (FTC) slapped Qualcomm with a
record 260 billion won ($208 million) fine for violating the nation's fair
competition rules. The watchdog ruled that the U.S. chipmaking giant demanded
higher royalties from companies using its rivals' products.
Qualcomm's stance in opposing the FTC ruling remains the same, while Monday's
announcement is a separate case from the antitrust dispute, said the CEO.
"We do disagree (with the ruling) and the legal process will continue," said
Jacobs.
Qualcomm drew $3.9 billion, or 35 percent of its revenues, from South Korea in
2008, according to FTC.
Market watchers question the actual benefits the research center will bring to
local companies, despite Qualcomm's claims that the center will create "win-win
relations."
"Foreign companies like Intel and Qualcomm announce their investment plans every
year, but rarely have we seen any achievement from them," said Kim Woon-ho, an
analyst at Prudential Investment & Securities. "I don't expect much change coming
from Qualcomm's building an R&D center."
"Four hundred million dollars is not really a large sum of money so we are not
giving much significance to it," said Denny Kim, an analyst at Eugene Investment
& Securities.
Qualcomm owns key patents for code division multiple access (CDMA), the world's
most widely used wireless network standard for mobile communications.
ylee@yna.co.kr
(END)

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