Our competitors have braked for a business combination between Qualcomm in the United States and NXP in the Netherlands, which is the largest semiconductor merger and acquisition (M & A) case in the semiconductor industry. Qualcomm`s acquisition of NXP is likely to limit competition in the short-range wireless communications (NFC) market. Therefore, it has taken corrective action to sell standard essential patents. The Fair Trade Commission (FTC) has granted conditional approval, and it appears that the fate of Qualcomm and the competition authorities, which are in the middle of a dispute over the KRW 1 trillion (USD 1 trillion).

The Fair Trade Commission, on January 18, said that it would impose corrective measures such as selling NFC patents or banning the use of patent rights after examining the Qualcomm • NXP business combination.

NFC is a technology used for short-range wireless communication within 10cm, and it is widely used in the IT industry, finance, and distribution fields mainly for settlement and identification purposes. In particular, NXP`s market share of NFC chips reached 74.6% by 2016, and the security factor chip also reached 69.1%.

Once Qualcomm acquires NXP, which already accounts for 70.2% and 56.4% of market share in the Code Division Multiple Access (CDMA) and Long Term Evolution (LTE) chipsets, . CDMA • LTE and NFC do not overlap, but given that each technology is embedded in mobile devices such as smartphones, the barriers to entry by other operators may increase due to changes in licensing policies.

The FTC also pointed out that Qualcomm`s decision to refuse to provide the necessary information and technical support to ensure interoperability between parts or to change the design in a way that interferes with compatibility. Currently, LTE and NFC chips operate separately, but if you combine the two technologies together, it will ultimately hamper innovation in the mobile device market.

Accordingly, the Fair Trade Commission ordered NXP to sell the NFC standard essential patents and system patents to third parties. It also allowed the NFC patents to be acquired but prohibited them from being patented and separated from other patents to provide their competitors with a free license under the "FRAND (fair, rational and non-discriminatory) principle."

"We have worked closely with the European Commission and the Japanese competition authorities in the course of the process," said Han Yong-ho, chief executive officer of the Korea Federation of Trade Firms. Explained. Qualcomm`s acquisition of NXP is also underway in other competitors, and the EU and China are expected to take steps similar to ours.

Qualcomm announced in October 2016 that it will acquire NXP for $ 47 billion (about 50 trillion won), and reported the merger to the FTC in May last year.

Meanwhile, apart from this, the ongoing FTC and Qualcomm`s legal tribunal of 1.31 trillion won has recently come to the second round after the Seoul High Court decided on a defense date in June.

Sejong city= By Kwon Dae Gyung kwon213@


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