Quick overview

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Qualcomm’s (QCOM) acquisition of Autotalks in June is currently under investigation by China’s State Administration for Market Regulation (SAMR).

The announcement of this investigation, made on Friday, led to a more than 4 percent drop in Qualcomm’s share price. This decline reflects investor concerns regarding Qualcomm’s significant dependence on the Chinese market; 46 percent of its fiscal 2024 revenue is projected to come from customers headquartered in China, including major smartphone manufacturers like Xiaomi.

Concerns about increased tech decoupling have led to volatility in Nvidia and other major semiconductor stocks.

The chip company is one of many businesses caught in the ongoing economic tensions between the US and China. The State Administration for Market Regulation (SAMR) in China has indicated that Qualcomm’s acquisition may violate the country’s anti-monopoly laws, although it did not specify which aspects of the transaction are problematic.

On the same day, former President Trump claimed in a Truth Social post that China is trying to strengthen its control over rare earth minerals and threatened a “massive increase” in tariffs on Chinese goods. Initially, a meeting was scheduled between Trump and Chinese President Xi Jinping at the APEC Summit in South Korea, but Trump later stated there was no longer any reason for the meeting to take place.

Similar to Qualcomm, Nvidia (NVDA), a leading AI chip manufacturer, has also been charged by SAMR for allegedly violating anti-monopoly laws in China. In September, SAMR announced that it would conduct further investigations into Nvidia’s transactions.

Nvidia has denied any wrongdoing. Additionally, China has advised businesses to steer clear of Nvidia’s products. In 2024, a state agency called for an investigation into Intel’s chips due to “frequent vulnerabilities and high failure rates,” according to the Cyberspace Security Association of China.

The trade dispute between the US and China has persisted for months, during which both countries raised and then lowered tariffs on each other’s goods by over 120 percent.