With its $6 million lobbying budget for 2018, Qualcomm Inc.’s spending to date far outpaced its industry peers.
The San Diego-based semiconductor company has maintained significant spending levels to gain the ear of D.C. leaders in the past few years. So far this year, it has outspent competitors such as Intel Corp. and Broadcom Inc., who have spent $3.07 million and $910,000 respectively, according to the Center for Responsive Politics’ database of lobbying expenses and campaign contributions.
“Semiconductors in general haven’t been strong lobbyists but Qualcomm might lead the way to increasing the payments,” said Kevin Cassidy, an analyst with Stifel, Nicolaus & Co. Inc.
A Big Impact
Miro Copic, a marketing professor with San Diego State University, added that lobbying gives research-heavy companies like Qualcomm the most bang for their buck.
“It’s an extraordinary means of using broad marketing dollars,” Copic said. “An ad campaign doesn’t have anything near the same impact.”
About half of the Qualcomm’s spending this year went to Washington, D.C.-based firm Covington & Burling LLP, which has been the company’s top firm for more than the past decade.
Last year, Qualcomm’s lobbying expenses peaked at $8.26 million. The company also secured two major political wins: The stopping of Broadcom’s acquisition attempt and the passage of the Tax Cuts and Jobs Act.
With Broadcom, President Donald Trump blocked the merger with an executive order in March, before a scheduled stockholder vote that could have put Broadcom’s candidates in control of the board of directors. The Committee on Foreign Investment in the United States (CFIUS) had also expressed security concerns over Qualcomm being acquired by a foreign company (Broadcom is now headquartered in the U.S., where it conducts most of its business, but was headquartered in Singapore at the time).
“It worked out for Qualcomm,” Cassidy said. “Their lobbying efforts were pretty clear with getting Broadcom away from trying to acquire them through CFIUS.”
Tax Cuts and Jobs Act
The Tax Cuts and Jobs Act let Qualcomm repatriate its $28.8 billion in income abroad at a much lower tax rate, though the company also reported it was hit with a $6 million charge as a result of the policy change. Slashing the corporate income tax rate to 21 percent also freed up some additional cash.
Intellectual property protections also ranked high on Qualcomm’s list of top issues. Copic said the new NAFTA, the U.S. Mexico-Canada Agreement, included tougher patent protections that will benefit Qualcomm.