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Qualcomm suspends 5G cooperation with Taiwan's ITRI

2017/10/25 19:30:27

File photo/ photo courtesy of Taiwan's Industrial Technology Research Institute (ITRI)

Taipei, Oct. 25 (CNA) Qualcomm Inc., a U.S.-based smartphone chip designer, has suspended its collaboration with Taiwan's Industrial Technology Research Institute (ITRI) on the development of 5G technology, the ITRI confirmed Wednesday.

The decision came in the wake of a NT$23.4 billion (US$774 million) fine imposed on Qualcomm by Taiwan's Fair Trade Commission (FTC) for violation of the country's antitrust regulations.

Qualcomm, however, did not state a reason for its withdrawal from the cooperation deal, under which the ITRI would have obtained early access to Qualcomm's 5G small cell technology, according to the institute.

The U.S. company has not given any indication either of whether it plans to resume the cooperative effort any time in the future, the ITRI said, adding that it was still assessing the impact of the decision.

In the meantime, the ITRI said, it will continue its own efforts to develop the 5G technology since it is crucial to Taiwan's industrial development.

The suspension of cooperation between the ITRI and Qualcomm is likely to slow the pace of building 5G communications base stations in Taiwan and hamper the country's efforts to launch 5G technology by 2020, according to the Ministry of Economic Affairs (MOEA), which oversees the ITRI's operations.

The ministry said it has asked the ITRI to make every effort to resume its cooperation with Qualcomm.

In February 2015, the FTC launched an investigation into allegations of anti-trust violations by Qualcomm of its chip technology.

After two years of investigations, the FTC ruled that Qualcomm was involved in direct or indirect practices to prevent other smartphone designers from competing in the Taiwan market for at least seven years.

The fine of NT$23.4 billion against Qualcomm was the heaviest ever imposed on a single company since the FTC was established in 1991 and was reported by some media as the reason why the U.S. company had decided to end its partnership with the ITRI on 5G technology.

Qualcomm has disputed the FTC decision, saying the fine bears no rational relationship to the amount of its revenues or activities in Taiwan and that it plans to seek a stay on the penalty and appeal the ruling.

According to the FTC, the official notice of its decision was delivered to Qualcomm on Monday and the fine would have to be paid within 15 days if an appeal in not filed in a Taiwan court during that period.

(By Jackson Chang and Frances Huang)