Qualcomm Considers Breaking Up Business


qualcomm

Qualcomm Inc. has announced that the company is expected to follow through with a strategic review that could result in the division of the company, among other options. The company has been under pressure from hedge fund Jana Partners to break off its chip business from its very profitable patent licensing business. In addition, Qualcomm Inc. may announce that it is considering other options such as giving back more cash to shareholders when the company’s third quarter results are released this Wednesday.

However, it is only a possibility that this will be Qualcomm’s official decision as the company's plans are in flux. This news comes after Qualcomm announced that it is preparing to lay off several thousand employees. More than 10 percent of its 30,000 person workforce will be laid off and the company is planning to officially announce the job cuts once its quarterly results are released.

As Chinese, European and South Korean regulators investigate Qualcomm for antitrust violations, it makes sense for the company to organize a break up. This will help avoid additional investigations and conciliate its investors. There is also the possibility for shareholder returns given the current desire for merging in the chip industry.

Qualcomm has recently been struggling with a 46 percent drop in second quarter profit in April. Major competition from Taiwan's MediaTek Inc. and a handful of small Chinese companies are threatening Qualcomm with their specialization in making chips for low-priced phones. The company forecasts third quarter revenue and profit below analysts' expectations in April, stating the occurrence due to the loss of a major customer along with delays in product launches by some smartphone makers will hurt sales of its flagship Snapdragon chips.

Via our proprietary website Just IT Hardware, ASAP Semiconductor is a rich resource for the procurement of all computer hardware parts. Prospective customers can browse our wide range of Qualcomm computer hardware parts at justithardware . If you are interested in a part, please feel free to contact our knowledgeable sales staff at sales@justithardware.com or call us at 1-714-705-4780 for a quote.

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