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Qualcomm files with SEC to sell stock in semiconductor subsidiary

SHARE Qualcomm files with SEC to sell stock in semiconductor subsidiary

WASHINGTON — Qualcomm Inc. filed with the Securities and Exchange Commission to sell stock in a subsidiary that manufactures semiconductors and software for wireless telephones.

Qualcomm, based in San Diego, will follow up the stock sale by distributing its remaining shares in the chip unit to Qualcomm shareholders, according to a registration statement filed with the Securities and Exchange Commission. The parent company expects the distribution to take place by August 2001.

Qualcomm developed wireless technology, known as code division multiple access, that is used by 57 million people worldwide. The company announced last week that chip shipments could decline 20 percent in the fiscal fourth quarter because of plunging demand in South Korea, its biggest market.

The chip unit generated revenue of almost $965 million for the nine months ended June 25, up from $788 million recorded in the comparable period one year earlier. Net income for the nine months slipped to $82.6 million this year from $195 million in 1999.

In addition to its chip business, Qualcomm generates revenue through licensing agreements for its CDMA technology. The parent company reported that third quarter net income more than doubled on higher royalty revenue. The parent company also sells wireless systems, including Globalstar phones and OmniTracs truck-tracking systems.

Qualcomm estimated that the stock sale by the chip unit would raise $100 million. However, this may be a nominal figure used to initially calculate the SEC registration fee, and the actual size of the offering could be larger. Qualcomm's current market value exceeds $47 billion.

Lehman Brothers and Goldman, Sachs & Co. will underwrite the stock sale, which was filed with the SEC under the name Qualcomm Spinco Inc. The semiconductor unit will seek to have its shares trade on the Nasdaq Stock Market.