Qualcomm, one of the world's largest chip making firms, is facing an antitrust probe from a Chinese commission for apparently violating an anti-monopoly law.
The investigation by China's National Development and Reform Commission (NDRC) was announced yesterday by Qualcomm, who were advised to keep the substance of the probe confidential.
"The Company is not aware of any charge by the NDRC that Qualcomm has violated the AML," the company wrote in a statement. "We will continue to cooperate with the NDRC as it conducts its confidential investigation."
Last week Qualcomm unveiled a new line of chips that it hopes will take advantage of the booming Asian market. The fourth generation Long Term Evolution (LTE) chips were reported to be a signal that the company was shifting its focus from the US to China.
4G LTE networks will be launched in China on 18 December, causing some analysts to speculate that the probe is designed to help domestic operators in the fight against their main US rival.
"We suspect this investigation is related to the forthcoming launch of TD-LTE by China Mobile... and the negotiations on chip pricing and license pricing between Qualcomm and Chinese-based handset [manufacturers] that are likely occurring right now," Travis McCourt, an analyst with Raymond James & Associates, told the BBC.
Williams Financial analyst Cody Acree, added: "You're getting ready to have this battle over 4G royalties and now you have this antitrust investigation".
"It may well be that this reform commission is beginning to throw up reasons and excuses for why China doesn't pay royalties on 4G."