Meet Qualcomm’s Newest Chinese Patent Deal

Qualcomm Inc. (NASDAQ: QCOM) is making a push as the 2015 year is coming to a close. Overall, the year was not a good one for Qualcomm, or most other major semiconductor producers as well, but the company is taking a positive step as the year winds down with a new patent agreement. The company announced that it has entered into a new 3G and 4G Chinese patent license agreement with Beijing Tianyu Communication Equipment.

Under the terms of the agreement, Qualcomm has granted Tianyu a royalty-bearing patent license to manufacture and sell 3G WCDMA and CDMA2000 (including EV-DO) and 4G LTE (including “3-mode” GSM, TD-SCDMA and LTE-TDD) subscriber units for use in China.

The royalties payable by Tianyu are consistent with the terms of the rectification plan submitted by Qualcomm to China’s National Reform and Development Commission.

Eric Reifschneider, senior vice president and general manager of Qualcomm Technology Licensing for Qualcomm, commented on the agreement:

Qualcomm is pleased to support the growth of Chinese companies such as Tianyu as part of our long-term collaboration with China’s mobile industry. This new agreement enables Tianyu to develop, manufacture and sell 3G and 4G devices, greatly enhancing their competitive position in the wireless landscape.

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Madam Rong Xiuli, CEO of Tianyu, added:

Tianyu recognizes Qualcomm as a global technology leader and innovator, and respects the value of the license we have obtained to Qualcomm’s Chinese wireless IPRs. We are pleased to sign this license agreement because it provides us with the opportunity to improve and expand our product offerings in China and certain overseas markets, empowering our users with greater access to advanced wireless services and information.

As 2015 comes to a close, Qualcomm has vastly underperformed the market, with the stock down over 30% year to date.

Shares of Qualcomm were trading down 3.2% at $51.18 Tuesday afternoon, with a consensus analyst price target of $62.23 and a 52-week trading range of $45.93 to $75.41.