Is Semtech becoming a new Qualcomm?

Qualcomm has faced multiple lawsuits and regulatory challenges related to its CDMA (Code Division Multiple Access) technology and its broader business practices, particularly concerning its licensing model and patent practices. Here are some key reasons and events surrounding these legal issues:

  1. Patent Licensing Practices: Qualcomm has a significant portfolio of patents related to CDMA and other wireless communication technologies. The company licenses these patents to various manufacturers of mobile devices. Critics have argued that Qualcomm’s licensing practices are anti-competitive, as the company often requires device manufacturers to pay royalties on the entire price of the device, not just the components that use Qualcomm’s technology. This has led to allegations of monopolistic behavior.
  2. Antitrust Allegations: Regulatory bodies in various countries, including the U.S. Federal Trade Commission (FTC) and the European Commission, have investigated Qualcomm for potential antitrust violations. The FTC filed a lawsuit against Qualcomm in 2017, alleging that the company engaged in anti-competitive practices by using its dominant market position to impose unfair licensing terms and by refusing to license its patents to competitors.
  3. Litigation from Competitors: Companies like Apple and other smartphone manufacturers have also sued Qualcomm, claiming that the company’s licensing practices are unfair and that it has engaged in anti-competitive behavior. For example, Apple accused Qualcomm of charging excessive royalties and of using its patent portfolio to stifle competition.
  4. Settlement and Legal Outcomes: Over the years, Qualcomm has reached settlements in some cases, while other cases have resulted in court rulings that have impacted its business practices. For instance, in 2019, Qualcomm reached a settlement with the FTC, which included changes to its licensing practices.
  5. Global Regulatory Scrutiny: Qualcomm’s practices have drawn scrutiny not only in the U.S. but also in other regions, including Europe and Asia. The European Commission fined Qualcomm for anti-competitive practices related to its chipset sales and licensing agreements.

Qualcomm’s legal challenges related to its CDMA technology and licensing practices stem from allegations of anti-competitive behavior, monopolistic practices, and disputes with competitors over its patent licensing model. These issues have led to significant legal battles and regulatory scrutiny over the years.

There is no clear evidence to suggest that Semtech is directly copying Qualcomm’s business practices related to CDMA technology. However, one key point stands out with regards to licensing practices:

  • Qualcomm: Gained a 90% market share of the 3G chipset in 2007 (1) by ignoring it’s FRAND (Fair, Reasonable, and Non-Discriminatory) commitment to the ETSI and other SDOs by demanding discriminatorily higher (i.e., non-FRAND) royalties from competitors and customers using chipsets not manufactured by Qualcomm. It seems that Qualcomm wants to control the market by selling it’s own chips.
  • Semtech: Does not license its LoRa technology to other companies, is sells the SX12xx chip for use in System-in-Package configurations (SIP) which means that other chip manufactures license the SX12xx chip for use inside their own chip. Examples are ST STM32WL series and Microchip SAM R34/35 series of chips. It seems that Semtech wants to control the market by selling it’s own chips.

In conclusion, Qualcomm and Semtech seem to have the following in common:

  • They do not want to license their IP to other companies
  • The want to control the the market by monopolizing the supply of chips

Are we witnessing the rise of a monopoly selling LoRa chips?

1) https://casetext.com/case/broadcom-v-qualcomm-2

2) https://ipwatchdog.com/2017/05/18/how-many-times-qualcomm-paid-old-technology/id=83332/

3) https://community.cadence.com/cadence_blogs_8/b/breakfast-bytes/posts/cdma