Qualcomm’s stock dropped nearly 4% on Friday after Chinese regulators announced a new investigation into the U.S. semiconductor company’s recent acquisition of Israeli chipmaker Autotalks, a move that signals rising tensions between Washington and Beijing just weeks before a highly anticipated meeting between the two nations’ leaders.

China’s State Administration for Market Regulation (SAMR) said Qualcomm may have violated China’s anti-monopoly laws in connection with the acquisition, which was officially completed in June—more than two years after the deal was first announced. The regulator released a brief statement confirming that a formal investigation into the American company was now underway.

In response, Qualcomm said it is “fully cooperating” with Chinese authorities and remains committed to supporting the growth and success of its partners and customers in China. The company continues to supply smartphone processors to major Chinese manufacturers, including Xiaomi and other top players in the mobile market.

The investigation marks another sign of growing scrutiny over U.S. technology firms operating in China. In recent months, Beijing has intensified regulatory actions against American companies, underscoring the deepening competition between the world’s two largest economies.

In September, SAMR also accused Nvidia of breaching anti-monopoly rules related to its $6.9 billion acquisition of Mellanox and certain agreements made during that transaction. Around the same time, reports suggested that Chinese authorities had advised domestic companies to reduce purchases of Nvidia’s advanced AI chips—a move interpreted by analysts as part of a broader strategy to strengthen China’s self-reliance in semiconductor technology.

Adding to the strain, Beijing recently introduced tighter export controls on rare earth minerals and associated technologies. These materials play a vital role in producing advanced electronics, defense systems, and semiconductor components, giving China significant leverage in the global supply chain.

The renewed regulatory actions come as U.S. President Donald Trump and Chinese President Xi Jinping are scheduled to meet face-to-face later this month on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea. Observers expect the talks to cover trade, technology, and security issues that have increasingly defined the relationship between the two countries.

While the outcome of the SAMR investigation remains uncertain, analysts believe it reflects Beijing’s strategic approach to counter U.S. influence in the global technology landscape. For Qualcomm, the probe represents not only a legal challenge but also a reminder of the geopolitical headwinds facing American chipmakers operating in China’s vast and competitive market.