Qualcomm Lowers Chance of Chip-Maker IPO

Qualcomm Inc. is more likely now to bypass an initial public offering for its chip business as a company deadline nears and slack demand for new stocks persists, Chief Executive Irwin Jacobs said.

There is “probably lower probability right now that we do it because we have a large amount of cash and the market has its difficulties,” Jacobs said in an interview after the company’s annual shareholder meeting in San Diego. The company will likely make a decision on the IPO within a month, and an offering is still possible, Jacobs said.

Qualcomm, which gets royalties from licensing patents for the mobile-phone standard it developed, last July announced plans to spin off its chip-making division so the business would be free to make semiconductors based on other wireless standards. Qualcomm developed Code Division Multiple Access technology.

“We do need to complete the spin by mid-October, and you need several months between the IPO and the spin,” Jacobs said. The division, temporarily known as Qualcomm Spinco, makes chips for mobile phones and wireless-network equipment. The division accounted for 48% of sales in the latest quarter.

Shares of San Diego-based Qualcomm fell $7.44 to $55.63, in Nasdaq trading. They’ve declined 32% this year.