CNBC Transcript: Qualcomm CEO Steve Mollenkopf Speaks with CNBC's David Faber Today

The following is the unofficial transcript of a CNBC EXCLUSIVE interview with Qualcomm CEO Steve Mollenkopf and CNBC's David Faber on CNBC's "Squawk on the Street" (M-F 9AM - 11AM) today, Thursday, July 26th. Watch video of the full interview on CNBC.com here!

DAVID FABER: WELL, QUALCOMM, OF COURSE, ANNOUNCING THAT IT HAS FORMALLY TERMINATED ITS PROPOSED $44 BILLION DEAL TO BUY NXP SEMICONDUCTOR. THIS AFTER FAILING TO RECEIVE APPROVAL FROM CHINESE REGULATORS. INSTEAD, QUALCOMM HAS AUTHORIZED A $30 BILLION STOCK BUY BACK, MUCH OF IT TO BE COMPLETED BY THE END OF FISCAL YEAR '19, AND SAYS IT REMAINS FOCUSED ON DRIVING ITS TECHNOLOGIES IN KEY INDUSTRIES. QUALCOMM'S CEO STEVE MOLLENKOPF JOINS ME RIGHT HERE AT POST NINE. AND WE'RE VERY MUCH APPRECIATIVE OF YOUR BEING HERE. MAKING THE TRIP CROSS COUNTRY AS WELL. THANKS, STEVE.

STEVE MOLLENKOPF: HAPPY TO - HAPPY TO BE HERE. GOOD TO SEE YOU.

FABER: NO SHORTAGE OF DRAMA, I MEAN IT JUST KEEPS GOING FOR QUALCOMM AND THIS COMPANY. LET'S TALK ABOUT NXP FIRST. YOU KNOW, WE'VE TALKED MANY TIMES ABOUT WHAT YOU SAW AS THE BENEFITS OF THE DEAL, GETS YOU DEEPER INTO AUTOMOTIVE, GETS YOU DEEPER INTO THE CHIP SETS FOR IOT. NO LONGER GOING TO HAPPEN. WHY SHOULD QUALCOMM'S SHAREHOLDERS FEEL OKAY GIVEN THE STRATEGIC IMPERATIVES THAT WERE INHERANT IN THAT DEAL, IN HOW THEY WERE GOING TO ADVANCE THEM FOR THE COMPANY?

MOLLENKOPF: WELL I THINK IF YOU LOOK - LOOK AT THAT DEAL, WE'RE - WE'RE DISAPPOINTED, OF COURSE. BUT THE COMPANY'S IN A MUCH BETTER PLACE, MUCH DIFFERENT PLACE, TODAY THAN WHERE WE WERE WHEN WE SIGNED THIS. WE'RE -- WE'RE AT $5 BILLION, OF NONMOBILE REVENUE. THAT'S UP 70% FROM THE TIME WE SIGNED THE DEAL. OUR IOT BUSINESS IS OVER A BILLION DOLLARS TODAY. OUR AUTO BUSINESS HAS ALREADY GOT A $5 BILLION BACKLOG, THAT WAS $3 BILLION BY THE BEGINNING OF THIS CALENDAR YEAR. SO WE ALREADY HAVE A BIG GROWTH IN THOSE MARKETS TODAY, TWO YEARS AFTER -- ROUGHLY TWO YEARS AFTER WE'VE SIGNED THAT DEAL. AND NOW WE'RE ON THE DOORSTEP OF 5G. 5G IS NOW ONE YEAR PULLED IN, LARGELY BECAUSE OF QUALCOMM'S EFFORTS, WHICH OCCURED DURING THAT ENTIRE ACTIVITY. SO WE FEEL LIKE WE'RE IN A GOOD SPOT. WE'RE ALSO GOING TO BRIDGE THAT GAP - THAT TIMEFRAME WITH PRETTY SIGNIFICANT BUYBACKS. SO I THINK THE EXECUTION RISK IS PRETTY MINIMAL DUE TO OUR ABILITY TO DELIVER ACCRETION IN THIS REGARD, BUT THE COMPANY IS IN A VERY STRONG PLACE.

FABER: DO YOU EVER LOOK BACK AND SAY, "I WISH I HAD DONE SOMETHING DIFFERENTLY HERE," MAYBE IN TERMS OF THE REGULATORY PROCESS? THERE IS NO WAY THAT I KNOW YOU COULD HAVE KNOWN YOU'D GET EMBROILED IN A DISPUTE, IN A MUCH LARGER NATURE BETWEEN THE U.S. AND CHINA. BUT COULD YOU HAVE MOVED WITH FASTER WITH THE REGULATORY APPROVALS? IS THERE SOMETHING YOU COULD HAVE DONE THAT WOULD HAVE CHANGED THIS OUTCOME?

MOLLENKOPF: I DON'T THINK SO. I THINK WE GOT CAUGHT UP IN A TRADE WAR AND KIND OF LARGER ISSUES ABOVE THE PAY GRADE OF THE TWO COMPANIES INVOLVED. THAT BEING SAID, WE THOUGHT IT WAS IMPORTANT TO BRING CERTAINTY TO THE PROCESS, MOVE ON AND REALLY FOCUS ON THE THINGS WE SAID. WE'RE GOING TO DRIVE VALUE AND -- WE HAVE TWO PATHS FORWARD AND NOW WE KNOW WHICH PATH WE'RE ON.

FABER: CHINA IS AN IMPORTANT PATR OF YOUR BUSINESS. I MEAN, I'VE MADE THIS POINT MANY TIMES. IT'S NOT AS THOUGH YOU'RE A STRANGER TO THAT COUNTRY, YOU DO BUSINESS THERE ALL THE TIME. DOES THIS IMPACT YOUR ABILITY TO DO BUSINESS THERE? DOES IT DRAW A LINE SOMEHOW IN THAT WHAT SEEMINGLY IS A GOOD RELATIONSHIP IN ONE OF THEIR KEY COMPANIES THERE, HAS BEEN HURT, IT WOULD SEEM TO ME AT LEAST, BY THEIR UNWILLINGNESS TO APPROVE THIS DEAL?

MOLLENKOPF: WELL, I DON'T - WE DON'T SEE ANY DIFFERENCE IN THE POSTURE TOWARDS US AS A COMPANY. IN FACT IF YOU LOOK AT THE RHETORIC AROUND THE DISCUSSIONS OR EVEN IF YOU PARTICIPATE IN THE DISCUSSIONS LIKE WE DID, VERY FRIENDLY, VERY CONSTRUCTIVE. I THINK THERE ARE JUST BIGGER ISSUINGS AT PLAY. NOW, THAT BEING THE CASE, I WILL ALSO POINT TO THE CASE THAT OUR BUSINESS IN CHINA REMAINS QUITE STRONG, WE REPORTED YESTERDAY A VERY STRONG QUARTER AS YOU KNOW. A LOT OF THAT ON THE STRENGTH OF CHINA. THE FORWARD - HAD A VERY STRONG POSITION IN CHINA. SO WE DON'T SEE THIS AS A -- ANY SORT OF RISK TO THE OVERALL BUSINESS, IT'S JUST A VERY DIFFICULT ENVIRONMENT TO DO LARGE M&A, AT LEAST TODAY.

FABER: YEAH, WELL, YOU KNOW. WE DO WONDER ABOUT THAT MORE -- SPEAKING IN TERMS OF THE LARGER PERSPECTIVE. CAN A TECHNOLOGY DEAL GET DONE THESE DAYS, DO YOU THINK, GIVEN WHAT YOU WENT THROUGH, IF IT REQUIRES APPROVAL FROM THE NHS AUTHORITIES IN CHINA?

MOLLENKOPF: WELL, IF IT WAS DIFFICULT OBVIOUSLY FOR US, YOU KNOW WHAT HAPPENED. IN OUR CASE, THAT'S PROBABLY NOT A HUGE QUESTION. WE HAVE CAPITAL ALLOCATION DECISION, WHERE IF WE THINK IT'S A GOOD TIME TO BUY BACK OUR SHARES, WE'RE GOING TO BE DOING THAT. AND I THINK ANY TIME WE WOULD RE-ENTER THE M&A MARKET, THESE ISSUES ARE PROBABLY GOING TO BE BEHIND US, HOPEFULLY ON THE GLOBAL STAGE.

FABER: I HOPE SO. AND THEN FINALLY, ARE YOU SURPRISED? I MEAN, MNUCHIN MADE AN EFFORT, WILBUR ROSS MADE AN EFFORT. ZTE GETS PUT BACK INTO BUSINESS. DID YOU THINK THIS WAS GOING TO COME? ARE YOU SURPRISED THAT AT THE END OF THE DAY THEY DID NOT ACQUIESCE IN CHINA?

MOLLENKOPF: WELL, I TELL YOU, THERE WAS NOTHING - THERE WAS NO LACK OF EFFORT BY ANYBODY INVOLVED. AND WE GOT GREAT SUPPORT REALLY FROM BOTH SIDES OF THE PACIFIC, ACTUALLY. AND WE HAD GREAT SUPPORT FROM OUR FRIENDS IN EUROPE, THE DUTCH AS WELL AS THE GERMANS. BUT I THINK THERE ARE JUST BIGGER ISSUES, THERE ARE A LOT OF ISSUES THAT ARE LARGER THAN QUALCOMM THAT ARE TRYING TO BE WORKED ON THE GLOBAL STAGE. SO IT WASN'T A LACK OF EFFORT OR A LACK OF SUPPORT FROM ANYONE.

FABER: YOU MENTIONED M&A, OF COURSE YOU HAD ALSO BEEN THE SUBJECT FOR A LONG TIME OF SOMEBODY ELSE'S DESIRE AND AS I'VE HAVE SAID, ALTHOUGH YOU HAVE BEEN DEEMED A NATIONAL CHAMPION IN A WAY BY THE U.S. GOVERNMENT, IT WOULD SEEM. DOES THAT PRECLUDE YOUR ABILITY TO BOTH GET BOUGHT AND POTENTIALLY BUY ANYTHING ELSE AT THIS POINT?

MOLLENKOPF: I DON'T THINK SO. I THINK THAT WHOLE NATIONAL CHAMPION MONIKER IS REALLY JUST A STATEMENT ABOUT HOW SIGNIFICANT THE TECHNOLOGIES WE WORK ON ARE TO INDUSTRIES, MULTIPLE INDUSTRIES. NOW, WE THINK WITH 5G, IT'S GOING TO BE EVEN MORE THE CASE, BUT I THINK IT'S NOT A THING THAT CONSTRAINS THE POSSIBILITIES FOR THE COMPANY.

FABER: ALRIGHT, LET'S TALK ABOUT THE FUTURE HERE. YOU REPORTED A GOOD -- A STRONG QUARTER, OF COURSE OF YOU HAVE MENTIONED A $30 BILLION BUY BACK, NEXT UP, THE LITIGATION WITH APPLE, IT WOULD SEEM, MOVES INTO A MORE IMPORTANT PHASE. GIVE US YOUR TIMELINE HERE OF YOUR EXPECTATIONS. SOMETHING WE HAVE DISCUSSED A LOT, IF OUR VIEWERS WANT A REFERENCE POINT ON THAT, THEY CAN LOOK BACK AT SOME OF THE INTERVIEWS WE'VE DONE, WE CAN MAKE THEM AVAILABLE ON CNBC.COM SO WE DON'T HAVE TO GO INTO DETAIL OF IT. BUT WHERE ARE WE ON THE LITIGATION?

MOLLENKOPF: WE'RE JUST ONE QUARTER FURTHER ON THE SAME STRATEGY. THINGS LOOK NO DIFFERENT TO US THAN THE LAST TIME I SAT IN THIS CHAIR AND TALKED TO YOU ABOUT IT. WE'RE JUST ONE QUARTER CLOSER AND YOU KNOW, WE HAVE TALKS AND WE WOULD LOVE TO SEE IT RESOLVED, BUT IF IT DOESN'T GET RESOLVED, WE'RE VERY HAPPY TO GO TO THE COURTS AND GET IT REVOLVED AS WELL.

FABER: ANY SENSE IN TERMS OF -- YOU MENTIONED THOSE TALKS, I MEAN, CAN WE ASSUME THAT A SETTLEMENT IS STILL A POSSIBILITY?

MOLLENKOPF: I THINK IT'S ALWAYS -- THERE'S ALWAYS A POSSIBILITY THAT WE COULD SETTLE. I MEAN, LISTEN, BIG COMPANIES - WE WORK THROUGH THESE ISSUES. WE HAVE A LOT OF EXPERIENCE DOING IT. AND SO THE KEY TAKE AWAY FOR US IS WE'RE MARCHING ON -- ON THAT STRATEGY. WE HAVEN'T SEEN ANYTHING DIFFERENT THAN WHAT WE EXPECTED. AND WE'RE WORKING HARD ON IT.

FABER: WHEN DO YOU EXPECT THAT YOU WE'LL HAVE AN ANSWER?

MOLLENKOPF: WELL WE TALKED ABOUT THE LEGAL TIMELINE. THERE ARE SOME SIGNIFICANT MILESTONES AT THE END OF THIS YEAR AND THE BEGINNING OF NEXT YEAR. AND AS I'VE ALWAYS SAID, THOSE MILESTONES CREATE THE ENVIRONMENT FOR DEALS TO HAPPEN. AND IF THEY DON'T HAPPEN, THE LEGAL JUDGMENTS DO AS WELL OFTEN TIMES. SO WE FEEL WE'RE VERY MUCH ON TRACK TO KEEP GOING.

FABER: LET ME ASK YOU A BIT ABOUT -- YOU KNOW WHAT, I HAVE TALKED TO ANY NUMBER OF YOUR INVESTORS OVER TIME. AND SINCE YOU HAVE BEEN CEO, THERE HAVE BEEN SO MANY CHALLENGES THROWN AT YOU, MANY OF THEM -- MOST OF THEM NOT OF YOUR OWN MAKING. BUT SOME PEOPLE SAY, "YOU KNOW WHAT, IT DOESN'T MATTER. THE NXP DEAL DIDN'T HAPPEN. THE APPLE LITIGATION. INITIAL TROUBLES WITH CHINA WHICH HAVE ALL BEEN RESOLVED SOMEBODY IN MANAGEMENT HAS GOT TO BE HELD ACCOUNTABLE, AND POTENTIALLY EVEN HAS TO GO." HOW DO YOU VIEW THAT WHEN I HEAR THAT FROM INVESTORS WHO SAY, "SOMEBODY'S GOT TO BE HELD RESPONSIBLE FOR ALL OF THESE THINGS," EVEN IF IT WASN'T OF YOUR OWN MAKING?

MOLLENKOPF: WELL, I THINK IF YOU LOOK - EVEN THOUGH THERE'S BEEN A LOT OF DISTRACTIONS IN THE COMPANY - THE EXECUTION ON THE PRODUCTS: THE BRINGING IN OF 5G, EVEN IF YOU LOOK AT OVER THE LAST YEAR, WHEN YOU LOOK AT WHAT WE'VE DELIVERED - AND I THINK THE MOST RECENT QUARTER IS A GREAT EVIDENCE OF IT, IT'S PROBABLY BEEN OUR BEST EXECUTION YEAR FROM PRODUCT DELIVERY AND BRINGING IN THE 5G. IT'S JUST A TREMENDOUS AMOUNT -

FABER: SO GIVE ME SOME EXAMPLES OF THAT THEN.

MOLLENKOPF: WELL THE 845 -- SNAP DRAGON 845. THE BIG COMPONENT OF THE QUARTER THAT WE DELIVERED YESTERDAY. AND REMEMBER THE QUARTER WAS 31 CENTS ABOVE THE MIDPOINT OF GUIDANCE, IN PART DUE TO RESOLVING PARTIALLY ONE OF THE LICENSE DISPUTES THAT WE ARE TALKING ABOUT. SO WE ARE CLICKING THINGS OFF THE LIST MUCH MORE QUICKLY THAN THEY'RE COMING ON THE LIST. INCLUDING YESTERDAY'S DECISION TO BRING CERTAINTY TO THE PATH FORWARD ON NXP. SO THERE ARE A LOT OF GOOD THINGS HAPPENING IN THE COMPANY. AND THAT'S BECAUSE WE HAVE REALLY TRIED TO STAY FOCUSED ON EXECUTION HERE AND NOT THE DISTRACTIONS.

FABER: YOU KNOW, I REMEMBER OF COURSE THE 635 TO 750 OBJECTIVE FOR EARNINGS FOR 2019 - FISCAL YEAR 2019. NOW THAT IS OF COURSE PENDING GETTING IT RESOLVED WITH APPLE, BUT YOU STILL FEEL CONFIDENT IF THAT IS THE CASE THAT YOU'LL HIT THOSE NUMBERS?

MOLLENKOPF: WE HAVEN'T CHANGED ANY VIEW ON THAT OUTLOOK. YES.

FABER: OF COURSE, WE DON'T KNOW ABOUT APPLE AND WE -- I GUESS WE WON'T KNOW. ISN'T IT NOW ABOUT THE FUTURE OF 5G AND HOW QUICKLY THAT COMES? AND WHERE ARE WE ON THE TIMELINE?

MOLLENKOPF: WELL, IT'S GOOD. WE'RE GOING TO SEE THE FIRST PRODUCTS IN 2019. WE'RE ALREADY SEEING THE DESIGN WINS AND THE TRIALS ARE - TO SUPPORT THAT - ARE ALREADY IN PLACE. YOU HAVE A BIGGER LAUNCH IN 2020. BUT YOU'RE GOING TO START SEEING IT IN THIS CALENDAR YEAR. SO THERE'S A LOT GOING ON AND WE'RE INVOLVED IN ALL OF IT.

FABER: AND SHOULD THIS SET UP MORE A COMPETITION OVER 5G WITH THE CHINESE? SHOULD I BE VIEWING IT -- THEIR UNWILLINGNESS TO APPROVE THIS DEAL, AS SORT OF ANOTHER WARNING SIGN THAT THEY'RE GOING TO BE GOING THEIR WAY IN 5G AND WE ARE GOING OURS?

MOLLENKOPF: NO. I THINK - YOU TEND TO SEE THESE BIG TECHNOLOGY TRANSITIONS, LIKE 5G, THEY TEND TO CREATE A GLOBAL FEATURE SET AND MORE ALIGNMENT. SO IF YOU LOOK TODAY, WHO ARE THE TWO COMPANIES THAT ARE DRIVING THE 5G ECOSYSTEM ON THE GLOBAL STAGE? WELL, IT'S QUALCOMM AND HUAWEI. THERE ARE OTHERS. THE TWO OF US WORK TOGETHER TO MAKE SURE 5G WORKS. AND I THINK PEOPLE FORGET THAT SOMETIMES WITH ALL OF THE RHETORIC. BUT IT TENDS TO CREATE, YOU KNOW, A POINT IN TIME WHERE THINGS GET RESOLVED AND WE HOPE THAT'S THE CASE HERE AS WELL.

FABER: YEAH. WELL, STEPPING BACK IF YOU CAN WITH ME, FOR A MOMENT HERE... DO YOU BELIEVE THAT THE INABILITY TO GET APPROVAL FROM CHINA WORSENS THE RELATIONS BETWEEN OUR TWO COUNTRIES WHEN IT COMES TO TRADE?

MOLLENKOPF: I THINK IT'S OBVIOUSLY NOT HELPFUL. BUT I DON'T KNOW IF THE TIMELINE TO RESOLVE THE TRADE ISSUES REALLY DEPENDS ON WHAT QUALCOMM DOES OR WHAT NXP DOES. IT'S LARGER THAN ANY OF THAT. AND YOU KNOW, WHAT WE DO IS WE WORK ON INNOVATION, IT TENDS TO PROTECT OUR BUSINESS IN TIMES OF LARGER ISSUE AND IT IS RIGHT NOW.

FABER: AND FINALLY SOME PEOPLE WILL SAY, JUST GIVE IT ANOTHER MONTH, GIVE IT ANOTHER TWO MONTHS, COME ON, THEY'RE GOING TO COME AROUND. WHY WAS TODAY THE DAY THAT YOU SAID IT'S GOT TO STOP HERE?

MOLLENKOPF: WELL, I MEAN, LOOK, WE HAVE BEEN CLEAR WHAT OUR STRATEGY WAS AND WHAT OUR VIEW WAS AND WE WERE TRUE TO THAT. AND I THINK YOU REPORTED ON THAT QUITE WELL AND WE DID EXACTLY WHAT WE SAID WE WERE GOING TO DO. AND NOW WE'RE MOVING ON, WE'RE FOCUSING ON THE ISSUE OF 5G AND OUR OWN ORGANIC GROWTH. WE'RE GOING TO RETURN MONEY TO THE SHAREHOLDERS LESS. AND THAT'S THE PATH WE'RE ON. IT'S A GOOD PATH.

FABER: CONCEIVABLY COMPETING WITH NXP TO AN EXTENT, FOR THAT AUTOMATIVE MARKET, I WOULD ASSUME AS WELL THOUGH, RIGHT?

MOLLENKOPF: WE DO. BUT THERE'S NO DYNAMIC CHANGE IN THE MARKET, WE HAVE BEEN WORKING TOGETHER AND COMPETING WITH NXP FOR YEARS. AND YOU KNOW, WE WISH THEM LUCK, IT'S A GREAT COMPANY, WE'RE SORRY WE DIDN'T GET TO WORK TOGETHER MORE CLOSELY. BUT, YOU KNOW, HAVE A REAL FONDNESS FOR THE COMPANY.

FABER: MAN WHY IS IT THAT YOU ATTRACT SO MUCH DRAMA? DO YOU HAVE ANY IDEA?

MOLLENKOPF: WELL ONE IS JUST THE AMOUNT OF - THE TECHNOLOGIES WE WORK ON ARE IMPORTANT. OUR BUSINESS MODEL IS ALSO UNIQUE AND SOMETIMES THE WAY IN WHICH YOU HAVE TO DEFEND IT TAKES LONGER AND OPENS UP PEOPLE TO DIFFERENT TYPES OF ATTACKS. BUT, LOOK, WE GET THROUGH THESE THINGS, WE THINK WE'RE IN THE FINAL INNINGS OF ALL OF THAT AND WE'RE MOVING FORWARD.

FABER: ALRIGHT. FINAL INNINGS. WELL, WE LOOK FORWARD TO SPEAKING IN THE FUTURE TO MAYBE, I DON'T KNOW IF IT'S EXTRA INNINGS OR ANOTHER GAME. BUT STEVE, THANK YOU. STEVE MOLLENKOPF, CEO OF QUALCOMM.

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