Qualcomm Inc. and the Chinese government have settled their dispute, with China levying a $975 million fine against the company and the San Diego firm pledging to decrease royalty rates for Chinese high-tech manufacturers that want to use Qualcomm’s extensive patent portfolio.

Qualcomm (Nasdaq: QCOM) announced the settlement after the market closed on Feb. 9.

The fine is 6.09 billion yuan — about $975 million at current exchange rates -- which will work out to 58 cents per share in fiscal 2015, Qualcomm said. That is less than the 10 billion yuan, or $1.6 billion, that Reuters and Bloomberg News predicted earlier in the day. Investors had been bracing for a fine as large as $1 billion.

In announcing the news, Qualcomm said it will become further engaged in China and that it plans to expand its relationship with the Shanghai-based foundry known as SMIC, aka Semiconductor Manufacturing International Corp. (NYSE: SMI). SMIC is working to produce microchips of 28 nanometers, which is ultra-fine in scale.

With news of the settlement, Qualcomm restated its fiscal 2015 earnings forecast, saying it will be in the range of $3.56 to $3.76 per share (down from $4.04 to $4.34 per share), on revenue of $26.3 billion to $28 billion. Previously, Qualcomm predicted a low end of $26 billion. The high end is unchanged.

Chinese mobile device manufacturers will now be able use Qualcomm technology under new terms.

Going forward, Qualcomm said it agreed to charge royalties of 5 percent for third-generation devices — including multimode 3G and 4G devices. It said it agreed to charge 3.5 percent for fourth-generation devices — including three-mode devices using a technology called LTE-TDD — that do not implement CDMA or WCDMA. In each case, Qualcomm said, it will use a royalty base of 65 percent of a device’s net selling price.

CDMA refers to code division multiple access, which was once Qualcomm’s bread-and-butter technology.

The San Diego business said it plans to offer licenses to its essential Chinese 3G and 4G patents separately from licenses to its other patents.

Qualcomm said it will give existing Chinese customers the chance to take the new terms for sales of branded devices for use in China as of Jan. 1.

The issue took more than a year to resolve.

In November 2013, Beijing’s National Development and Reform Commission told Qualcomm that it was investigating whether the U.S. company broke China’s anti-monopoly law.

Regulators issued a decision finding that Qualcomm violated the law, the San Diego business said on Feb. 9, adding that the company will not pursue any more legal action to contest the findings. Qualcomm said it was disappointed with the investigation’s results but pleased that the commission reviewed and approved its plan to rectify the situation.

“We are pleased that the investigation has concluded and believe that our licensing business is now well positioned to fully participate in China’s rapidly accelerating adoption of our 3G/4G technology,” Qualcomm President Derek Aberle said in a prepared statement.

CEO Steve Mollenkopf said the company looks forward to investing further, engaging further and growing its business in China.

The resolution, Mollenkopf said, has removed the uncertainty that surrounded Qualcomm’s business in China.