US-China Trade Conflict: Concerns for US microchip giant, Qualcomm

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As China and the US weigh next steps in their trade conflict, there's one area that's being hit hard: Technology. One manufacturer in particular has a lot at stake in both countries -- and now finds itself in an uncertain position. CGTN's Phil Lavelle reports from Los Angeles.

It is a game with billion dollar stakes. Neither side wants to lose. And here's a key pawn.

TOM MERRITT TECH JOURNALIST AND PODCASTER "If you have a phone, chances are it has one of their chips in it, or technology that they've licensed."

Qualcomm is a Californian microchip maker. Found in devices in billions of pockets globally. A big share: "About 40% of the world's market."

And now finding itself in the crosshairs of an economic spat.

WILLIAM YU UCLA ECONOMIST "I think the interests of individual companies are sometimes different from the interests of the nation."

PHIL LAVELLE LOS ANGELES Qualcomm is a major supplier here in the United States. And in China too. It has its feet in both markets. But what could be described as an enviable position for any tech company, now proving to be problematic.

One of Qualcomm's biggest customers is Chinese telecoms giant, ZTE. But the U.S Government has now banned ZTE from purchasing American tech for the next seven years. Meanwhile, Qualcomm has seen its plans to buy a company called NXP Semiconductors - a crucial deal - held up by the Chinese.

On top of that, the American Government is preparing new restrictions on Chinese investments in the US. And it could restrict partnerships between American and Chinese companies.

WILLIAM YU UCLA ECONOMIST "In the short term, it seems like a mess, but in the long run, I think the US has some kind of reason to address this kind of issue which is global imbalance in terms of trade."

And this is not just a battle for now - but for the future too. For the very heart of 5G internet. - connecting everything from cars to homes to industry to power grids. Qualcomm's desperate to keep its place in this developing area:

"They want to stay dominant."

But it's in competition with China's Huawei. And remember, Huawei - now effectively blocked from selling a lot of devices by the U.S - officials citing espionage fears.

PHIL: "How important is it for Qualcomm to be at the forefront of 5G?"

TOM MERRITT TECH JOURNALIST AND PODCASTER TOM:"Qualcomm wants to be one of the major equipment makers for the infrastructure as 5G gets built and it's important to them because they want to make sure that they continue to have the next thing to sell equipment to and not get left behind."

WILLIAM YU UCLA ECONOMIST "I think if they keep focusing on their R&D and paying attention to innovation, I think they might still be the winner in the long run."

PHIL LAVELLE LOS ANGELES As for Qualcomm, well we reached out to them. Unsurprisingly, they said 'no comment.' This is a very sensitive issue for this company. Because it doesn't know how this will pan out - nobody does. The rules of this game, not so clear. And subject to change at any moment. Phil Lavelle, CGTN, Los Angeles.