Qualcomm and TDK to expand RF and Wireless Charging Collaboration

Qualcomm Incorporated and TDK Corporation today announced an agreement to form a joint venture to enable delivery of RF front-end (RFFE) modules and RF filters into fully integrated systems for mobile devices and fast-growing business segments, such as Internet of Things (IoT), drones, robotics, automotive applications and more, under the name RF360 Holdings Singapore PTE. Ltd. (RF360 Holdings). The joint venture will draw upon TDK's capabilities in micro-acoustic RF filtering, packaging and module integration technologies and Qualcomm's expertise in advanced wireless technologies to serve customers with leading-edge RF solutions into fully integrated systems.

In addition to creating RF360 Holdings, Qualcomm and TDK will expand their collaboration around key technology fields, including sensors and wireless charging. The agreement is subject to receipt of regulatory approvals and other closing conditions and is expected to close by early 2017.

“TDK is a leading electronic components manufacturer with cutting-edge expertise in RF filters and modules, and we are looking forward to deepening our collaboration and together accelerating innovation and better serving the ecosystem for next-generation mobile communications,” said Steve Mollenkopf, CEO of Qualcomm Incorporated. “The joint venture’s RF filters will bolster Qualcomm RF360™ front-end solutions to enable Qualcomm Technologies, Inc. (QTI) to deliver a truly complete solution to the ecosystem. This will enable us to expand our growth opportunity by allowing us to accelerate our strategy to provide OEMs across our business segments with fully integrated systems that will enable them to deliver at scale and on an accelerated timeframe.”

“The joint venture with Qualcomm is a win for both companies, which complement each other ideally,” said Mr. Takehiro Kamigama, President and CEO of TDK. “Customers will benefit from our unique and comprehensive portfolio, which will further strengthen TDK’s position in key growth business segments and open new and exciting business opportunities. In this context, it was a major objective to ensure that our customers can continue to expect a seamless supply of discrete filters and duplexers, as well as modules.”

In addition to the joint venture, Qualcomm and TDK have agreed to deepen their technological cooperation to cover a wide range of cutting-edge technologies for next-generation mobile communications, IoT and automotive applications, including passive components, batteries, wireless charging, sensors, MEMS and more.

RF360 Holdings will initially be owned 51 percent by Qualcomm Global Trading PTE. Ltd. (QGT) and 49 percent by EPCOS AG, a wholly-owned subsidiary of TDK (EPCOS). As part of their agreement, filter and module design and manufacturing assets, plus related patents, will be carved out from TDK and its subsidiaries and be largely acquired by RF360 Holdings, with certain assets being acquired directly by Qualcomm affiliates. QGT has an option to acquire (and EPCOS has an option to sell) the remaining interest in the joint venture 30 months after the closing date.

Giving effect to the payments to be made at the closing, additional future payments to TDK based on sales by the joint venture of RF filter functions, as well as Qualcomm and TDK's joint collaboration efforts, and assuming QGT's exercise of its option to acquire EPCOS' interest in the joint venture, the aggregate transaction value is expected to be approximately $3 billion US dollars. Qualcomm expects the transaction to be accretive to Non-GAAP earnings per share in the 12 months following the transaction close.