Qualcomm puts semiconductor business into new subsidiary QTI

July 3, 2012 — Wireless technology company Qualcomm Incorporated (NASDAQ:QCOM) will change its corporate structure, moving substantially all of its R&D activities, its QCT semiconductor business, and other product and services businesses into a new wholly owned subsidiary, Qualcomm Technologies Inc. (QTI).

Qualcomm was in the top 5 of IC Insights’ ranking of semiconductor suppliers in Q1 2012.  The chipmaker was #6 in 2011 according to the International Data Corporation (IDC) Worldwide Semiconductor Applications Forecaster (SAF); #7 in 2011 according to IC Insights. Also read: Qualcomm dominates cellular baseband chip market in 2011

The corporate structure changes are designed to protect and insulate QCOM’s patent portfolio from any claims resulting from actions and activities by portions of the company other than the Qualcomm Technology Licensing Division (QTL). QTL and corporate functions, with most of Qualcomm’s patent portfolio, will be part of the parent company. QTI and its subsidiaries will own patents specifically developed for purposes of providing open-source software contributions by QTI and its subsidiaries, whereas substantially all of the remainder of the company’s patent portfolio will continue to be owned by Qualcomm Incorporated.

QTI and its subsidiaries’ product and services businesses will increase their work with open source software in the future and this restructuring will, among other things, help ensure that QTI and its subsidiaries’ activities do not result in the licensing of any of Qualcomm Incorporated’s patents, including its 3G and 4G patents. QTI and its subsidiaries will have no rights to grant licenses or other rights to patents held by Qualcomm Incorporated. However, the company is not preparing a spin-out of the QTL or QCT businesses. “The change in Qualcomm’s corporate structure generally formalizes the way the company has been operating, and will continue to operate, its primary businesses,” according to Qualcomm’s statement.

There will be no changes to the intellectual property that is currently owned by Qualcomm Innovation Center, Inc., which works closely with the open source community to accelerate the advancement of the wireless industry as a whole.

Qualcomm anticipates that the new corporate structure will become effective during the first fiscal quarter of 2013 and does not expect any change to the way in which it defines its operating segments for financial reporting purposes as a result of this restructuring.

Qualcomm Incorporated (NASDAQ: QCOM) provides 3G and next-generation mobile technologies. For more information, visit Qualcomm’s website, www.qualcomm.com.

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