Broadcom to takeover Qualcomm for KRW 111 trillion
Kim Ji Young | kjy@ | 2017-11-06 10:53:17

[Digital Times, Kim Ji-young] Broadcom, the world`s fourth-largest semiconductor company, is expected to acquire Qualcomm, which is in third place. If the merger and acquisition takes place, the mobile, network, and automotive semiconductor markets will likely change.

Bloomberg, Reuters and others said on November 5 that Broadcom has taken over Qualcomm. The total acquisition price is over USD 100 billion (KRW 111 trillion), and it is expected to be recorded as the biggest `big deal` in the IT industry. Qualcomm and Broadcom have not commented on the report. Reuters reported that there will be a merger announcement on November 6.

Qualcomm is an absolute strength in the AP market for mobile communications chips and smartphones. Broadcom has an unrivaled market share in the wireless LAN, Bluetooth and GPS (Global Positioning System) markets. Both companies will dominate the mobile phone chip market, and the two companies will be able to take the lead in the future semiconductor market as well as emerge as the absolute stronghold of the telecom semiconductor market that covers all the distances from near and far. It has been acquired for USD 37 billion (approximately KRW 41.27 trillion) in chipmaker Avago, which is based in Singapore in 2015. Its mission is to use Broadcom as it is. Founded in 1961 as a subsidiary of Hewlett-Packard (HP) Semiconductor, Avago was acquired by Agilent in 1999. In 2005, it was acquired by a private equity firm such as Kohlberg Kravis Roberts (KKR) and Silver Lake Partners. In 2014, the company acquired LSI, a system semiconductor specialist, for USD 6.6 billion. Recently, Brocade, a leader in data center networking, has been awarded USD 5.5 billion and is under review by regulatory authorities around the world.

Qualcomm, which is seeking to acquire Broadcom, is working with Apple on a patent-related court, and is filing lawsuits against regulators and antitrust concerns in Korea and Europe. Reuters stated that Broadcom has a close relationship with Apple, which could have a significant impact on the mobile industry if Qualcomm is acquired and the patent licensing agreement is made less expensive.

However, even if the merger of the two companies is resolved, it should pass the examination of the regulatory authorities of each country. How this deal will affect Qualcomm`s NXP acquisition is of interest. European semiconductor maker STMicroelectronics and others have said that Qualcomm would take a monopoly when it bought NXP.


By Kim Ji Young kjy@


[ copyright ¨Ï The Digitaltimes ]