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Qualcomm: US alignment could be positive for Brazil
The recent shift in Brazilian politics, tilting more to the US model under Donald Trump, could be positive for the country in a context of regulation alignment, market opportunities and potential changes in the global supply chain as the US-China trade row intensifies, according to a top Qualcomm executive.
The California-based tech group's president Cristiano Amon, who was born and educated in the South American country, was speaking with Brazilian media at Qualcomm's Snapdragon summit in Hawaii.
Amon was appointed president in January this year. He holds a degree in electric engineering from Unicamp, in Brazil's "tech hub" city of Campinas in São Paulo state. It is the same region where Qualcomm will set up a highly anticipated semiconductor factory (see below).
Amon does not believe the trade war between China and the US will be so intense as to significantly damage the company. That is a view he shares with his boss, CEO Steve Mollenkopf.
Despite that, earlier this year Mollenkopf blamed the trade spat for Qualcomm's failure to acquire NXP Semiconductors for US$44bn.
In an interview with CNBC, Mollenkopf said he and his company were "caught" in the crossfire between the two countries, as the Chinese government was holding back on approving the deal.
Still, the CEO sees no risk for the company's business in the face of the dispute, although he points out that it is a "very difficult" time for mergers and acquisitions.
Adding to the tensions was the arrest by Canadian police of Meng Wanzhou, CFO and daughter of the founder of Chinese telco Huawei, on the request of the US. Wanzhou was detained in Vancouver and Washington is seeking her extradition.
The reasons for the arrest were not revealed, but reportedly they are related to violations of US sanctions on Iran. Huawei has denied the CFO committed any crime and Beijing has called for her release.
The US has also opened investigations into whether Huawei has flouted economic embargoes on Cuba, Sudan and Syria. Since 2012, the US government has refused to purchase equipment from Huawei on the grounds that its use threatens national security.
FLEXIBILIZATION
While the alignment with the US could be positive, Amon highlighted that Brazil will only be able to seize opportunities if it eases the difficulties for doing business in the country, cutting red tape and reducing the tax burden.
"Brazil's competition has to be with China and India, not with smaller countries," he said. "We have over 7,000 R&D personnel in India. Brazil should have more R&D as well."
Amon said the nation of his birth needs a long-term and defined economic strategy and defended the revision of the network neutrality rules in the face of future 5G applications, especially in the areas of health and public security, which he believes will require some sort of traffic prioritization.
The executive also said the changes could be an opportunity for companies to create private 5G IoT networks.
On the development of the 5G ecosystem, Amon confirmed that Qualcomm is not working directly with Spain's Telefónica, which has a strong presence in Latin America.
BRAZIL FACTORY
Questioned by BNamericas, Amon said he is "optimistic" about the semiconductors factory in Brazil.
The US$200mn project – courted by the Brazilian government since 2012 – was finally confirmed in February thanks to an MOU with Universal Scientific Industrial (USI), a subsidiary of Taiwanese company Advanced Semiconductor Engineering (ASE).
The plant will initially develop Qualcomm chipsets for smartphones and IoT devices under the concept known as Qualcomm System in a package (QSip).
Qualcomm struggled for months to find a site for the factory with the right characteristics.
The company expects to start construction/adaptation in January, manufacturing the first chipsets months later and start full operations in 2020.
The first two models of smartphones embedded with QSip chips and designed in Brazil, however, are expected for this year, Qualcomm's Latin America president Rafael Steinhauser said previously.
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