Monday 22 October 2018

US chipmaker sells stake in Chinese joint venture as watchdog weighs Qualcomm bid

Qualcomm campus in San Diego, California. Photo: Mike Blake/Reuters
Qualcomm campus in San Diego, California. Photo: Mike Blake/Reuters

Cate Cadell

US chipmaker NXP Semiconductors, the target of a $44bn (€35bn) takeover by Qualcomm that is awaiting approval by Chinese anti-monopoly regulators, has sold its stake in a Chinese chip-design joint venture.

NXP sold its 40pc of Suzhou ASEN Semiconductors to Taiwanese venture partner Advanced Semiconductor Engineering for $127m, according to a stock exchange filing.

The sale could potentially help ease competition concerns by lowering NXP's exposure to the Chinese market as the country's commerce ministry considers Qualcomm's takeover bid.

Qualcomm has received approval from the other eight of nine required regulators to finalise its acquisition.

In January, NXP announced the end date for the transaction was extended to April 25, following multiple prior extensions.

A spokesman for NXP said the transaction was "part of the usual pruning of NXP's asset portfolio" and not related to the acquisition.

Qualcomm and the commerce ministry did not immediately respond to Reuters' requests for comment.

Chinese regulators are considering the deal at a time of heightened trade tension between China and the United States over a proposed US plan to introduce tariffs on imports from China, including in high-tech sectors.

Last month, the US government blocked the acquisition of Qualcomm itself by Singapore's Broadcom, citing national security concerns and worries about China gaining the upper-hand in fifth-generation (5G) mobile network technology.

The saga continues to play out. Qualcomm shareholders re-elected the board of directors on Friday with weak support from shareholders, who grilled the chipmaker over its strategy following its successful defence against the $117bn hostile bid from Broadcom.

Qualcomm has been under pressure to defend its decision to take Broadcom's bid to a US national security panel for review. This resulted in US President Donald Trump blocking the deal. (Reuters)

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