The Fair Trade Commission’s fine on Qualcomm Inc is likely to have substantial impact on Taiwanese brands and semiconductor companies in the long term, Minister of Economic Affairs Shen Jong-chin (沈榮津) told lawmakers yesterday.

“Qualcomm has already placed orders for Taiwan’s semiconductor firms for next year and 2019, so we forecast the impact might emerge two years from now, in the worst-case scenario,” Shen said during a question-and-answer session at a meeting of the legislature’s Economics Committee.

The commission on Oct. 11 fined Qualcomm NT$23.4 billion (US$775.5 million), saying that the world’s largest smartphone chip supplier had unfairly manipulated prices and hurt market competition.

The Industrial Technology Research Institute (ITRI, 工研院) on Wednesday last week confirmed that it received a verbal notice from Qualcomm that the US firm was stopping talks on collaboration on 5G technology.

The ministry has been vocal about its opposition to the fine on Qualcomm.

The ministry respects the commission’s ruling, but it is worried that the incident will hurt Taiwan’s industry development, Shen said.

“From the ministry’s perspective, industrial development should be prioritized ahead of fair trade, as it involves national interests,” Shen said.

Under the worst-case scenario predicted by the ministry, Qualcomm might allocate more orders to foreign semiconductor firms and reduce its orders to Taiwan’s foundry, chip testing and packing services providers after next year, he said.

The combined orders Qualcomm placed on Taiwan’s foundry, chip testing and packaging service providers totaled NT$155.7 billion last year, ministry data showed.

Such a reduction in orders might consequently affect the supplies of Qualcomm’s chips and modules to Taiwan’s smartphone vendors, he said.

More than 80 percent of Asustek Computer Inc’s (華碩) ZenFone series used Qualcomm’s chips last year, according to Asustek.

HTC Corp (宏達電) has also used Qualcomm’s processors for its flagship smartphones over the past few years.

Shen said Taiwan’s networking system providers had been looking forward to cooperating with Qualcomm in building 5G small-cell base stations through ITRI’s planned collaboration with the US company.

“Taiwan’s networking system providers need Qualcomm’s advanced technologies for 5G development,” Shen said.

ITRI has approached Taiwanese IC designer MediaTek Inc (聯發科) as a back-up plan for 5G technology development, but it has not given up on talking Qualcomm into resuming its collaboration, the minister said.

In related news, Shen confirmed that Southern Taiwan University of Science and Technology principal Tai Chein (戴謙) is one of the three candidates for the chairmanship of CPC Corp, Taiwan (CPC, 台灣中油).

Shen said the ministry will make a decision regarding the appointment within two weeks, as the state-run company needs to have a leader to guide it as soon as possible.