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Biggest chip deal in history: Broadcom is considering buying Qualcomm

In the US, perhaps the biggest deal among chip manufacturers that has happened in the history of the IT industry. Broadcom, a specialist in radio chips, is currently considering purchasing the chip giant Qualcomm, which is well known for its ARM-based mobile SoCs.

As the US economic service Bloomberg reports, citing sources that are to be familiar with the project of Broadcom, the company could face the acquisition of the competitor Qualcomm. According to the report, Broadcom is currently being advised by banks and financial specialists on the possible purchase, it goes on to say. The talks are still supposed to take place behind closed doors.

In general, the considerations of Broadcom are still at a relatively early stage, so it is unclear whether the chip manufacturer even starts an actual takeover attempt and whether the business can come about. A final decision had not yet been made and there are no guarantees that the considerations are put into action. Qualcomm’s stock was extremely positive about the news of a potential takeover – up 13 percent in one day.

Qualcomm is currently worth about $ 92 billion after the price rises, while Broadcom’s market value is currently around $ 107 billion. Broadcom was not launched in its current form until 2016 when Avago Technologies acquired the former Broadcom Corporation for $ 37 billion. The company had just announced this week that they wanted to relocate the headquarters from Singapore to the US – what US President Trump celebrated as a great success.

 

However, the background might well be Broadcom’s interest in overcoming the hurdles to acquire chip supplier Brocade, which US regulators are currently still skeptical about. Even with a takeover of Qualcomm, a complete move from Broadcom to the US should make much easier. So far, the group has its headquarters in Singapore but calls the Californian city of San Jose already the second most important location.

Recognized above all for its mobile technologies, Qualcomm is considered the largest supplier of ARM processors for use in smartphones and other mobile devices of all kinds. Recently, the company has come under increasing pressure from competition authorities around the world classify Qualcomm’s licensing policy as problematic and because of the exploitation to determine large market power. In addition, Apple threatens to fall away as one of the main customers for modem technologies, because the iPhone maker is currently trying to make itself independent of Qualcomm.

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