Qualcomm in $975M settlement with Chinese govt

China ends Qualcomm probe
China ends Qualcomm probe   

Qualcomm reached a roughly $975 million settlement with the Chinese government, the company announced on Monday.

The penalty—amounting to 6.088 billion Chinese Renminbi—was part of a resolution with China's National Development and Reform Commission, which had investigated the firm under the country's anti-monopoly law.

The NDRC issued an official decision that Qualcomm had violated this law, and the company agreed not to contest that finding.

"We are pleased that the investigation has concluded and believe that our licensing business is now well positioned to fully participate in China's rapidly accelerating adoption of our 3G/4G technology," Derek Aberle, Qualcomm's president, said in a news release. "We appreciate the NDRC's acknowledgment of the value and importance of Qualcomm's technology and many contributions to China, and look forward to its future support of our business in China."

Read More Qualcomm 'very committed to resolving' China probe: CEO

As a result of this resolution, Qualcomm updated its financial guidance for fiscal year ending Sept. 27, 2015. The company said its revenue is now estimated to be $26.3 billion to $28.0 billion compared to prior guidance range of $26.0 billion to $28.0 billion.

Additionally, it updated its non-GAAP diluted earnings per share estimates to $4.85 to $5.05 (which excludes the charge from the fine imposed by the NDRC), compared to the prior guidance range of $4.75 to $5.05.

Qualcomm will be strong partner with China: CEO
Qualcomm will be strong partner with China: CEO   

The company's GAAP diluted earnings per share estimates were originally $4.04 to $4.34, but the company altered this guidance to 3.56 to $3.76—this included the Chinese penalty.

As part of the agreement, Qualcomm said it will "offer licenses to its current 3G and 4G essential Chinese patents separately from licenses to its other patents and it will provide patent lists during the negotiation process."

The deal also sees the chip-maker lower its royalty rates on patents used in China, the company said..

Qualcomm said it has agreed to give existing licensees an opportunity to elect to take new terms for sales of branded devices in China as of Jan. 1, 2015.

Read MoreFor Qualcomm, China settlement may be the beginning

"Qualcomm has played an important role in the success of the mobile and semiconductor industries in China for many years, and we look forward to building upon this foundation as we grow our investments, engagement and business in China," Qualcomm CEO Steve Mollenkopf said in the release.

Discussions in Beijing over one of the most contentious cases under China's 2008 anti-monopoly law had intensified in recent weeks, culminating in meetings between Qualcomm senior executives and NDRC officials on Friday.

Qualcomm is just one of several overseas companies, including Microsoft Corp, that have come under investigation in China for allegedly anti-competitive practices.

—Reuters contributed to this report.