Qualcomm has had a difficult month. First, news came that Samsung is unlikely to use Qualcomm’s flagship Snapdragon 810 SoC in the upcoming Samsung Galaxy S6. Now, China’s National Development and Reform Commission (NRDC) and Qualcomm announced that they had reached a settlement on a long-running anti-trust case, with the company agreeing to pay a record US$975 million in fines. The settlement was long in coming – Qualcomm’s share price actually increased after the deal was announced due to decreased uncertainty about the fine.

More interesting for makers of smartphones and tablets, however, is the second part of the agreement. Qualcomm has agreed to cut its royalty rates on multimode 3G/4G devices to 5 percent and a 3.5 percent on other 4G devices. Additionally, the rates will be calculated not on the full selling price of the device, but on 65 percent of the net selling price. Ultimately, this means that the royalty rates will actually be 3.25 percent for 3G/4G devices and 2.27 percent for 4G devices.

Since non-Chinese licensors of Qualcomm’s technology pay their fees based on 100 percent of their net selling price, this represents a competitive advantage for Chinese manufacturers. This advantage may be temporary, however, as non-Chinese licensors are likely to try to negotiate better deals with Qualcomm in light of the agreement. Nevertheless, this may make it easier for Chinese manufacturers of handsets and connected tablets to compete on the global stage in the next few quarters.

Finally, the third part of the settlement was that Qualcomm would be required to grow its partnership with Shanghai-based SMIC. This will likely come at the expense of Taiwanese semiconductor maker TSMC, Qualcomm’s current main foundry, at least for 28nm processes.