Qualcomm Inc., the company that specializes in making smartphone chips, fell by a whopping 44 percent in profits for the fourth fiscal quarter.

According to the Wall Street Journal, the company's struggle with its patent licensing business overshadowed the positive news it has in terms of sales of smartphone processors.

Furthermore, the company also projected lower profit than Wall Street expected in the current quarter due to the licensing issues. As for its shares, it fell about 5 percent in after-hours trading.

Arguably the biggest manufacturer of processors and modern microchips used on handheld gadgets, Qualcomm has been struggling with issues in the past year that include pressure from an activist investor, antitrust investigations and moves by customers Apple Inc. and Samsung Electronics Co. to use more chips of its own design.

In addition, Qualcomm also announced back in July that it plans to cut expenses by about $1.4 billion and begin a review of its strategic options, include the possibility of separating its chip design and patent-licensing business.

It's also been under intense pressure from activist investor Jana Partners LLC, which is urging the company to consider a split and other options to boost its share price. Over the years, it considered splitting into two, but it always results with Qualcomm ultimately rejecting the idea.

Steve Mallenkopf, the company's chief executive officer said that the review is on track and he expects it to be completed by the end of this year.

But despite the struggle, Qualcomm still sees better opportunity in the future. As noted by Fortune, Derek Aberle, the company president, said that with nearly $31 billion in cash, it is in a good position to make business acquisitions.

The company also stated that it completed several deals this year including the purchase of British chip firm CSR and networking chip company Ikanos.

Apart from Qualcomm, many chip companies, under margin pressure, is also consolidating with deals like Intel's move to buy Altera for $16.7 billion and even Avago buying Broadcom for $37 billion.

But this move is not exclusive to the big players in the market, smaller companies like Dialog Semiconductor also bought Atmel.

Moreover, Forbes also reported that despite the issues that hampered the company's fourth quarter results, Qualcomm said that the chip business is still strong. Plans to penetrate new markets is also in the works, as the company is developing specialized chipsets based on its successful "Snapdragon" mobile chips.

As said by CEO Steve Mallenkopf, "We're fanning out into new markets, we're using a lot of the same technology in phones and adapting it."