The chip agreement with Qualcomm has expired, and the future of LG 5G mobile phone is worrying

According to Reuters, it is still uncertain whether LG Electronics' new 5G smartphones will be sold smoothly, because the company said that the differences between them will not be unified in the chip license agreement that Qualcomm will expire this month. .

In a filing filed with the US court on Tuesday, LG Electronics opposed Qualcomm’s decision to appeal against the US antitrust decision, arguing that it would force it to sign another unfair agreement by setting aside the ruling.

"If Qualcomm does not participate in negotiations with LG in accordance with the court's order, LG will not be able to choose, and will only re-sign the chip supply license agreement in accordance with Qualcomm's terms," ​​LG filed in a federal court in San Jose, California.

The new chip licensing agreement raises concerns about the smooth sale of LG's 5G smartphones, which is critical for the current loss-making handset maker LG.

"If LG Electronics fails to renew its contract with Qualcomm, it is likely that no mobile phones will be produced because LG itself does not produce chips," said BNKSecurities analyst ParkSung. "This will cause catastrophic damage to its mobile business."

A LG spokesperson said that due to ongoing negotiations with Qualcomm, she was unable to elaborate on the potential impact.

After the company's 5G smartphone debuted in South Korea in May, it launched the first 5G smartphone from Qualcomm in the US in the same month.

According to market research firm Counterpoint, as of the first quarter of this year, LG is the third-largest smartphone supplier in the US market, with a market share of 11%, behind Apple and Samsung.

After terminating the 2018 agreement to seek better terms with chip makers, the company has been renegotiating licensing agreements with Qualcomm. However, the two companies failed to reach a new agreement and their temporary license agreement will end this month.

At the end of May, Qualcomm asked US federal judges not to implement her antitrust decision during the appeal. Qualcomm said that the judge's ruling will lead to "complete restructuring of its business relationship", and if it wins the appeal, the situation will not be reversed.

LG said that if the court decides to suspend the anti-monopoly ruling, Qualcomm will be able to extend its chipset monopoly to the 5G market.

"Qualcomm's request to retain the court's order will cause LG to cause irreparable damage in negotiations with Qualcomm and may ultimately affect the entire 5G market," LG said in the document.

Email: Info@ariat-tech.comHK TEL: +00 852-30522540ADD: Rm 2703 27F Ho King Comm Center 2-16,
Fa Yuen St MongKok Kowloon, Hong Kong.