China launches antitrust probe into US chip firm Qualcomm

China's top market regulator announced Friday that it opened an antitrust probe into the US chip giant Qualcomm's acquisition of Israeli chip firm Autotalks, in a new move that would ramp up the tech war between the US and China.

Qualcomm is accused of breaking China's anti-monopoly law in connection with its purchase of the Israeli company Autotalks, according to the State Administration of Market Regulation (SAMR). In June, a little more than two years after it was initially announced, the transaction was formally finalized.

After the SAMR's announcement, Qualcomm's shares dropped by around 1.3% in pre-market trading on Friday.

Qualcomm announced in June that it had completed the acquisition of the Israeli company, which develops automotive chips and "vehicle-to-everything" (V2X) communication solutions.

The company, known for its Snapdragon mobile device chips, generates 46% of its revenue from China, the world's largest smartphone market.

In its 2024 financial statements, Qualcomm stated that sales in China and Hong Kong constituted 46% of its revenue, and noted that dependence on the Chinese market could pose risks due to trade tensions between the US and China.

TECH WAR

Ahead of trade negotiations, Chinese authorities have recently increased tensions between Beijing and Washington by targeting US tech giants in legal cases.

The US tech company Nvidia was accused by the SAMR in September of breaking the nation's anti-monopoly statute in connection with its purchase of Israeli-American chipmaker Mellanox Technologies and certain agreements made during the transaction. Beijing has allegedly been deterring local companies from purchasing Nvidia processors in the meantime.

Previously, China also launched a cybersecurity investigation into US memory chip manufacturer Micron Technologies in March 2023.

China also increased export restrictions on rare earths and associated technology this week. Rare earth elements are essential to high-tech sectors, including electronics, automotive, and military.

During the last week of October, US President Donald Trump and his Chinese counterpart Xi Jinping are expected to have a face-to-face meeting in Gyeongju, South Korea, on the sidelines of the Asia-Pacific Economic Cooperation summit.