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US chipmaker Qualcomm has resisted pressure from an activist investor to break up, arguing its structure is the best way to grow.

The California-based company, which has a market value of $70bn and employs about 31,000 people, has been examining options including a separation of its licensing and chip set businesses since July, as slowing chip demand brought investor scrutiny. The company has suffered this year from a broader pullback in the smartphone market and Samsung’s decision to use its own chips in its flagship Galaxy devices, instead of Qualcomm’s.

“The strategic benefits of the current structure will best fuel Qualcomm’s growth as we move through the upcoming technology transitions and extend our technologies into new user experiences, services and industries,” said Steve Mollenkopf, chief executive.

The chip set business is a “significant contributor” to its patent licensing, he said, and drives adoption of new technology and intellectual property across the mobile industry.

Mr Mollenkopf added that keeping the two units together fuelled both R&D and returns to shareholders, as well as being “meaningfully more cost and tax efficient”.

Qualcomm shares, which have slumped 35 per cent this year, rose 2.5 per cent by markets close in New York. By contrast, the Nasdaq, home to the world’s largest technology companies, is up 5.5 per cent in 2015.

At the heart of the issue has been whether Qualcomm would be better off separating its chipmaking business, which generates the bulk of its revenues, from its patent licensing arm that accounts for more of overall profits as it hoovers up royalties on patents.

Jana Partners, an activist investor, took a $2bn stake in Qualcomm in April. In July, Qualcomm appointed two new independent directors and said it would cut up to 4,500 staff as part of a move to cut $1.4bn from its annual costs. The new representatives were part of the committee that undertook the review. Boston Consulting Group analysed potential alternatives, while Goldman Sachs, Evercore and Centerview Partners also advised.

The committee considered “full and partial separation of our licensing and chip set businesses, tracking stocks, a subsidiary IPO and various changes to our capital structure”, Paul Jacobs, Qualcomm chairman, said on a conference call on Tuesday.

Qualcomm also considered whether splitting the business would help to resolve antitrust investigations, which have been a recurring issue for it around the world in recent years in various different aspects of its business. However, Mr Jacobs said the committee decided separating the chip set and licensing business would have no benefit in handling such investigations.

Alongside the review, Qualcomm said that thanks to cost-cutting and underlying demand for chips used in mobile phones, its earnings per share for the fiscal first quarter would be either at or better than the high end of the range it had set out.

Qualcomm has now signed deals with four of the top five equipment manufacturers in China, Mr Mollenkopf said. “We also continue to be encouraged by the support we are receiving from the Chinese government.”

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