Investors put their chips on Broadcom mega

Investors put their chips on Broadcom mega

Investors put their chips on Broadcom mega

Qualcomm and Broadcom declined comment on the reports from Bloomberg and the Wall Street Journal, but Broadcom Chief Executive Hock Tan has a history of aggressively acquiring companies to bolster his company's growth. Qualcomm is known for its Snapdragon chipsets used to power many smartphones. Qualcomm is looking to complete a $40 billion acquisition of NXP Semiconductors, while Broadcom has a $5.5 billion offer for Brocade Communications that it is waiting to complete. Well, Qualcomm happens to be in the middle of an ongoing existential crisis perpetuated by a legal showdown with Apple, which has always been a Qualcomm buyer for wireless modems that enable the iPhone to communicate with telecom networks. Qualcomm, in suing Apple, says it is not obligated to license those like to does with industry standard technology.

The value of Broadcom's bid has not been decided, though an offer in the range of around $70 to $80 per share is being contemplated, one of the sources said. Even though Qualcomm's component is considered to be the best, Apple is trying to get back at the company for various patent and legal issues.

There would also be some synergy with the bid, since both companies make chips that connect devices to each other and to the Internet.

Qualcomm has tried unsuccessfully to halt the sale of iPhones in both the United States and China. Broadcom fell slightly to trade up about 1 per cent, for a market valuation of $107-billion. This time the San Diego chipmaker is suing Apple for allegedly sharing proprietary Qualcomm technologies with its market rival, Intel.

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Broadcom keeps a presence in Irvine and a US headquarters in San Jose.

Qualcomm may soon be extended a way out courtesy of Broadcom, which itself supplies Apple with Wi-Fi and Bluetooth combo chips.

Also, the $100 billion buyout would be the largest purchase of a chipmaker, so Broadcom and Qualcomm will need to make strong cases for such a purchase.

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