[News] Qualcomm Commits to USD 700 Million Investment in Taiwan Over 5 Years in Settlement with Fair Trade Commission

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Qualcomm was fined NTD 23.4 billion by Taiwan’s Fair Trade Commission in 2017 for antitrust violations. Both parties reached a settlement the following year, which sparked some official discontent. However, a report from Korean media outlet The Elec has pointed out that this move ultimately contributed to Taiwan’s long-term industrial growth.

Under the settlement in the subsequent year, Qualcomm reportedly committed to investing USD 700 million in Taiwan over the next five years. This included establishing operational and manufacturing facilities, testing centers, and other investments, with the plan set to conclude by the end of 2023.

Qualcomm was accused of leveraging modem chip patents to force companies into unfavorable licensing agreements, resulting in fines in Taiwan, China (2015), South Korea (2016), and the EU (2018). Taiwan initially imposed a fine of NTD 23.4 billion on Qualcomm but later reduced it, instead requiring Qualcomm to commit to investing USD 700 million over the next five years to promote local industries such as 5G.

The report points out that, at that time, Taiwan lagged behind the US, China, Japan, and South Korea in 5G development, necessitating this compromise. The reports suggest that this decision, which now appears to be correct, was not intended to boost the 5G industry but to pivot towards the semiconductor sector. Over the past five years, industry dynamics have rapidly shifted focus to the semiconductor sector, with Qualcomm channeling substantial funds into Taiwan’s chip packaging industry.

Taiwanese officials reportedly stated that Qualcomm has successfully implemented its industrial investment plan over the past five years while maintaining a strong relationship with Taiwan. All aspects of the promised investment have been fulfilled, with the investment amount exceeding USD 1.4 billion, far surpassing the initial commitment of USD 700 million—effectively doubling Qualcomm’s investment amount.

Reports further indicate that Siliconware Precision Industries (SPIL) has confirmed Qualcomm’s purchase of 500 pieces of equipment dedicated to handling Qualcomm’s backend demands. Additionally, a South Korean packaging company informed TheElec that they lost Qualcomm orders to Taiwanese competitors over the past few years. In essence, Taiwan’s government initiative has also benefited the local packaging industry, despite this not being the original intention.

While SPIL’s performance was weak during the global chip market downturn last year, its revenue steadily grew from 2018 to 2022. Qualcomm not only provides equipment and orders to SPIL but also deploys engineers directly at SPIL’s plants to ensure proper chip packaging.

Qualcomm continues to entrust its high-end chip packaging orders to Amkor’s Incheon plant. However, the report suggests that Qualcomm’s close partnership with Taiwanese packaging companies may lead to more opportunities.

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(Photo credit: Qualcomm)