Rumour: Qualcomm considering splitting into two companies

Chip giant Qualcomm is considering splitting itself into two companies, an American newspaper reports. This may involve a division that produces chips and one that collects royalties on patents.

The company is currently considering “strategic options,” writes the business newspaper the Wall Street Journal, with splitting being one of the options. Qualcomm is also considering other options to keep shareholders happy, including paying more money to shareholders. Qualcomm was prompted to do so by an activist shareholder who believes Qualcomm should investigate a split, cut costs and take other measures.

According to the WSJ, if the split goes through, there’s a good chance that it will involve a split between a company that produces chips and an organization that manages the company’s patents. While Qualcomm gets more of its revenue from chips sales, most of its profits come from collecting patent royalties.

Although the split seems even further away, Qualcomm is already taking drastic measures this week to cut costs. Qualcomm is announcing thousands of layoffs this week, according to the generally well-established tech site The Information.

Qualcomm has not confirmed that it is considering a split, but it wouldn’t be the first time Qualcomm plans to do so. Fifteen years ago, the chipmaker was also on the brink of splitting up, but it stalled when it landed a number of major licensing deals.