Qualcomm, Inc. (NASDAQ:QCOM) has announced that it has secured three major deals with Chinese handset manufacturers and the total value of the deals is $12 billion.
The mobile chipset maker scored the hat-trick courtesy of its subsidiary Qualcomm Technologies which signed three non-binding Memoranda of Association (MOUs) with Chinese firms. The three companies are Vivvo, OPPO and Xiaomi and they will receive smartphone components from Qualcomm as part of their new contracts. The three MOUs are part of a portfolio of deals valued at $250 billion between Chinese and U.S companies that were unveiled during President Trump’s visit to China.
“We are continuing our commitment to investing and helping advance China’s mobile and semiconductor industries,” stated Qualcomm CEO, Steve Mollenkopf.
Mollenkopf also stated that Qualcomm has upheld strong relationships with the three Chinese firms for many years. He also added that the contracts align with China’s plan to support more growth in its domestic industry. The contracts between Qualcomm and the three Chinese companies are expected to last for three years.
Qualcomm signed the MOUs together with OPPO, Xiaomi, and Vivvo at a ceremony which was held in Beijing at the Great Hall of the People. U.S President Donald Trump and President Xi Jinping of the People’s Republic of China attended the event alongside the executives of other leading firms in China and the U.S. Mollenkopf pointed out that he felt honored to be part of the event which highlights the importance of strong business relationships between the two nations.
China and the U.S have both established themselves as powerhouses when it comes to business and technologies that drive the future. China happens to be one of the biggest markets for most of the tech firms in the U.S including Qualcomm. In fact, more than half of Qualcomm’s revenue comes from China. The new contracts with the three companies are expected to add significantly to the chip maker’s revenue. Some major companies in the U.S have also set up manufacturing facilities in China. The two countries therefore have a strong business relationship that provides a lot of economic benefits to each other and thus the need to continue growing such relationships.
Qualcomm stock closed the latest trading session on Wednesday at $65.49.