Qualcomm announced on Tuesday that it has completed comprehensive review of its corporate and financial structure and has unanimously decided not to split into separate chipmaking and technology licensing businesses, Reuters reported.
“Following the review, upon the unanimous recommendation of the Special Committee, the Board unanimously concluded that the Company's current corporate and financial structure best positions Qualcomm to maintain its technology leadership and product strength, so as to drive the greatest long-term stockholder value”, Qualcomm said in a press release.
The company’s earnings have plummeted by over 40 percent in each of the last three quarters. CEO Steve Mollenkopf said the company has "a focused plan" in place that it believed would drive growth and is already off to a good start implementing that plan.
Qualcomm said that the current structure provides the best opportunities for it to build on its roadmap, extend its technology into new categories and sectors and innovate in new technology areas including enhanced technology/IP creation, enhanced adoption of new technology, development of leading-edge products, enhanced role with standards bodies and customers, attractive financial returns and much more.
"Given the dynamic industry and competitive environment, we decided to take a fresh look at our structure to ensure we were doing everything possible to enhance the value of the Company and position ourselves for long-term success”, said Paul Jacobs, Executive Chairman and Chairman of the Board of Qualcomm Incorporated.
Forbes reported that Qualcomm has considered break ups several times in the past. In April, Jana Partners reintroduced this idea when it revealed it had taken a over $2 billion stake in the company. Jana asked Qualcomm to consider the option of a breakup, along with cutting costs and altering executives’ compensation mechanism.
The US chipmaker still faces a substantial pressure on its licensing practices. Antitrust investigations have been recently launched into the company in South Korea and Taiwan, as reported by Forbes. Besides, the European Union has also charged Qualcomm with violating antitrust laws and in China the antitrust investigation concluded with a $975 million fine.
