As a dominant global brand, Qualcomm has an obligation to its shareholders to ensure its assets are not unduly exposed to geopolitical and regulatory risks that could jeopardize financial performance. Yet the company’s operations and supply chains involve significant exposure to the People’s Republic of China, exposure increasingly associated with legal, reputational, and national security concerns.
This exposure introduces substantial risk, particularly in light of potential sanctions,1 trade restrictions, and forced labor enforcement actions. The Chinese Communist Party (CCP) poses a direct threat to U.S. national security, and U.S. companies operating in China face scrutiny2 for inadvertently supporting entities tied to the People’s Liberation Army. These risks are materially significant to shareholders and may result in reputational damage, legal liabilities, and operational disruptions.
If tariffs or sanctions are imposed on China, corporations with significant exposure could face substantial losses in assets and revenue streams comparable to those suffered by companies exiting Russia after its invasion of Ukraine. The Uyghur Forced Labor Prevention Act (UFLPA) prohibits3 goods tied to forced labor from entering the U.S., and since 2022, U.S. Customs and Border Protection has detained4 billions of dollars’ worth of goods. Future trade restrictions or sanctions could further impact companies like Qualcomm dependent on Chinese supply chains and negatively affect their ability to deliver returns to shareholders.
As per data5 from the corporate accountability group 1792 Exchange, Qualcomm’s financial exposure to China places $24 billion in company assets at risk, almost two-thirds of the company’s global assets. This risk only becomes more significant when the international ramifications are considered. Estimated sanctions would put more than $3 billion at risk, threatening more than 10% of Qualcomm’s annual global revenue. While Qualcomm has disclosed elements of its China exposure,6 it has not disclosed the potential concessions made to secure CCP approval for operations, how these arrangements influence corporate decision-making, and the long-term risk this poses to shareholder return. This lack of transparency leaves shareholders unable to adequately assess risk. As such, shareholders are right to ask Qualcomm to explain the steps it is taking to mitigate these risks to continued company success.
In keeping with its fiduciary obligation, Qualcomm should commission and publish an assessment of the legal and reputational risks created by its exposure to China. This review should evaluate the company’s exposure and provide recommendations for mitigating material risks. ​​
1
https://www.bloomberg.com/news/articles/2025-05-30/us-plans-wider-china-tech-sanctions-with-subsidiary-crackdown
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2
https://www.nytimes.com/2024/09/23/us/politics/us-china-research-military.html
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3
https://www.cbp.gov/trade/forced-labor/UFLPA
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4
https://www.cbp.gov/newsroom/stats/trade/uyghur-forced-labor-prevention-act-statistics
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5
https://1792exchange.com/spotlight-reports/china-risk-database/
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6
https://www.qualcomm.com/company/locations/china
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