Samsung seeks to go it alone

Samsung Electronics will seek less dependency on Qualcomm in its production of mobile phones by developing its own chips. “We made a late start in the mobile phone industry, but now we’re competing on an international level and we’re spending a lot of money on R&D,” Lee Ki-tae, president of the telecommunications network sector, said yesterday at a press conference. Mr. Lee did not hesitate to voice his dissatisfaction about Qualcomm’s high royalties. “It’s like putting a chip into the airplane and then asking us to pay a certain percentage of the airplane,” he said. Qualcomm, a mobile chip manufacturer based in San Diego, holds the patents for the code division multiple access standard, or CDMA, which is used in Korea. Recently, the company has been suspected of discriminating against Korean companies with higher royalties and pre-paid license fees, which were exempted in contracts with a company in China. Mr. Lee, however, was careful not to blame Qualcomm. “The current contract was made when we were minor players. When we didn’t have the technology, we had to learn from them, but now we have developed our own CDMA chips and are developing new W-CDMA chips that support moving image transmissions,” he said. “We paid a high price, but we got our money’s worth,” he added. The senior official also denied rumors that Samsung Electronics depends mostly on parts made in foreign countries. “We cannot depend 100 percent on domestic parts, since it increases vulnerability to foreign exchange rate fluctuations. But about 70 to 80 percent of the parts are locally made,” he said. Mr. Lee did not set a specific timetable for renegotiations with Qualcomm. The patents will expire in 2007. by Wohn Dong-hee