Qualcomm shares fall after China opens antitrust probe into the U.S. chip giant

Qualcomm's stock experienced a decline on Friday as Chinese regulators announced an investigation into the company's acquisition of the Israeli chip manufacturer Autotalks. This development has heightened the existing tensions between the United States and China, especially with crucial diplomatic meetings scheduled for later this month. In premarket trading, Qualcomm's shares were down approximately 3%. The State Administration of Market Regulation (SAMR) in China indicated that Qualcomm is suspected of breaching the nation's anti-monopoly laws concerning its recent acquisition. This deal was finalized in June, following over two years of negotiations. The SAMR's brief statement confirmed the initiation of an inquiry into Qualcomm's business practices. When approached for comment, Qualcomm did not immediately respond. The company is a significant supplier of smartphone chips to major Chinese manufacturers, including Xiaomi. This scrutiny comes during a period where U.S. technology firms have faced increased regulatory attention from Chinese authorities. For instance, in September, Nvidia was also accused by the SAMR of violating anti-monopoly regulations linked to its acquisition of Mellanox, along with associated agreements. Additionally, reports suggest that China is advising local companies against purchasing Nvidia chips. In a related move, the Chinese government has tightened its export controls on rare earth materials and technologies, which are essential for various high-tech sectors, including automotive, defense, and semiconductor industries. As tensions mount, U.S. President Joe Biden and Chinese leader Xi Jinping are anticipated to meet during the Asia-Pacific Economic Cooperation summit in Gyeongju, South Korea, at the end of October.