Qualcomm Inc.(Nasdaq: QCOM) said Thursday it will postpone the spin-off of its Spinco semiconductor unit, citing unfavourable market conditions. The company also extended licensing of its CDMA technology.
Shares of the company, which will release its quarterly report after Thursday's bell, were up 2.50 to 64.00.
Qualcomm Spinco is the popular name for the company’s Code Division Multiple Access (CDMA) digital wireless technology division.
In a statement, the mobile phone technology giant blamed the recent slump in chip stocks for the Spinco delay. The semiconductor market has seen a downturn amid concerns of slowing growth.
Qualcomm said that the Spinco IPO, originally scheduled for the fall, would be put off until January at the earliest.
The company also said it has also received a ruling from the Internal Revenue Service stating that any future Spinco spinoff should be tax-free to Qualcomm and its stockholders.
In a separate statement, the company announced that its existing CDMA licensing arrangment with Kyocera Corp. (NYSE: KYO) will be extended to third-generation CDMA technologies, wireless local loop, and CDMA modem card products. Kyocera's original CDMA license covered only cdmaOne applications.
Under the deal, Kyocera will still pay the same licensing and royalty rates. Shares of the company rose 1.06 to 133.94.