An imminent in-depth inquiry by the US Federal Trade Commission (FTC) into Qualcomm's purchase of Autotalks, an Israeli auto-chip manufacturer, is on the horizon, according to exclusive information from Politico insiders. The move comes after Qualcomm's announcement in May of its intention to acquire Autotalks Ltd, a key player in the development of crash-prevention chips for vehicles. The specifics of the agreement, however, have remained undisclosed.
The core expertise of Autotalks revolves around crafting specialised chips tailored for the V2X communication technology sector, catering to both conventional and autonomous automobiles. By absorbing Autotalks into its fold, Qualcomm aims to substantially bolster its foothold in the automotive sector, solidifying its position in this rapidly evolving domain.
Notably, the European Union has also stepped into the picture, signalling that Qualcomm must navigate the realm of EU antitrust regulations in its pursuit of Autotalks. EU regulators have highlighted the necessity for the US chipmaker to secure their approval for the intended acquisition. A consortium of 15 EU nations, including heavyweights like France, Italy, and Spain, have formally requested the European competition authority to scrutinise the forthcoming deal.
As the spotlight intensifies on this impending transaction, voices from Qualcomm, Autotalks, and the FTC remain conspicuously silent, refraining from immediate comment on the matter.
In a separate development earlier this month, Qualcomm's projection of fourth-quarter sales fell short of market expectations. The ongoing sluggishness in global economic growth has led to tepid consumer spending, especially in areas such as smartphone and gadget acquisitions. This downturn has compelled the tech giant to reassess its revenue forecasts, setting the stage for potential challenges ahead.
Meanwhile, Qualcomm is considering laying off more employees amid falling smartphone sales, macroeconomic uncertainties and risks in China, the media has reported. The company which has around 51,000 employees, reported disappointing sales that missed forecasts in quarterly earnings.
The San Diego, California-headquartered company's third quarter (Q3) earnings for the year saw a 25 per cent decrease in sales of mobile chipsets, compared to last year, which amounted to $5.26 billion. Qualcomm's fiscal year runs from October to September. The company's net income dropped by over 50 per cent YoY in the previous quarter.