According to the Taiwan Free Times, the Fair Trade Commission in Taiwan has decided not to accept Qualcomm's proposal for an administrative settlement and will instead impose a fine of NT$234 billion. Industry analysts from the network manufacturing sector have examined the rulings from both the mainland and South Korea regarding the Qualcomm case, noting that these countries have prioritized broader economic and industrial interests. In contrast, Taiwan’s approach appears less strategic, raising concerns that if the case drags on, Taiwanese manufacturers may continue to pay high royalty fees, while mobile phone brands could face long-term disadvantages in the 5G era. Additionally, network equipment makers might miss out on critical 5G base station opportunities. A settlement would likely be more beneficial for the overall interests of Taiwanese factories.
China-Korea-Taiwan High-Quality Cases Comparison Table
A senior executive from a major network equipment manufacturer, who has closely followed the global mobile phone industry, stated that Qualcomm has historically charged a 5% patent licensing fee based on the total device price, along with demands for reverse licensing, non-essential patents, and bundled authorizations—practices that are widely considered unfair. While such authorization methods should be regulated, the industrial structures of the three regions differ significantly. Therefore, it is crucial to consider the opinions of relevant authorities and develop a comprehensive strategy for penalties that aligns with broader economic goals.
The regulator bluntly criticized Taiwan’s approach, highlighting that the commission announced the highest penalty in history, even going as far as sending media teams to publicize the decision. However, industry experts argue that the purpose of the punishment is unclear and fails to account for international competition. This approach could harm downstream manufacturers of mobile phones and network equipment, delaying business opportunities and creating long-term inefficiencies.
Taiwanese factories face higher license fees and risk missing 5G business opportunities.
In contrast, the mainland has resolved its issues with Qualcomm through a structured negotiation. According to the supervisor, the mainland's stance was clear and focused on promoting local industries. Previously, many Chinese manufacturers were unable to export their devices without Qualcomm's patent protection. For example, Xiaomi faced accusations of selling phones in India and eventually had to rely on Qualcomm's patents. After reaching a settlement, Qualcomm reduced its licensing fees by 60%, stopped reverse licensing, and ceased bundling non-essential patents. The conditions were more favorable for mainland manufacturers, allowing them to export with patent protection and achieve better long-term benefits.
Taiwan’s Fair Trade Commission has rejected Qualcomm’s settlement offer. According to the director, this means that Taiwanese manufacturers will continue to pay higher patent fees than their mainland counterparts, while prolonged litigation could delay 5G development. This could leave Taiwanese companies at a disadvantage in the rapidly evolving 5G market. As a result, network equipment manufacturers may lose key opportunities in the critical 5G base station sector, further widening the gap between Taiwan and other regional players.
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