According to a report from Bloomberg, Broadcom is looking to acquire telecommunications and semiconductor multinational giant Qualcomm, for more than $100 Billion. This move would see Qualcomm either become a subsidiary or be merged into Broadcom.
Information is scarce currently, but the acquirement of Qualcomm by Broadcom would make it the largest ever takeover of a chipmaker, and one of the largest takeovers ever of firms. This would value each of Qualcomm’s shares at about $70 each. Currently, they are worth $62, rising by approximately 15% since the news broke.
This news follows on the heels of Qualcomm’s acquisition of NXP Semiconductors for a sum of $47 billion. This means that Broadcom would also be purchasing NXP Semiconductors in its acquisition of the San Diego firm. The news also comes at a time when Qualcomm is battling Apple on multiple international patents, and with Qualcomm filing yet another lawsuit against Apple just yesterday. The company has been battling antitrust suits in South Korea and Taiwan, and was also accused of having invalid chip licenses by Apple. All of this may seem to devalue the company in the eye of the consumer, however, both Broadcom and Qualcomm harbour a vast amount of patents, so the combined amount coupled with the already strong grip Qualcomm has over the phone market may prove to be a profitable acquisition for Broadcom.
Broadcom is already a major supplier of WiFi chips for various devices, and coupled with the heavy grip that Qualcomm holds in the Android SoC market, an acquisition or merger would lead to a near-complete dominance of one segment of the Android component market by just one giant company. If the acquisition were to take place, just about every Android device would have a Broadcom-made chip inside.
As Broadcom is not a SoC manufacturer by itself, there will be no decrease in the supply within the SoC market. This would, however, decrease the range of hardware that manufacturers can put into their devices. At the moment, this acquisition is only a prospect and is in no way confirmed to happen, so we’ll see what happens in the coming days and weeks.
Source: Bloomberg
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