Investors put their chips on Broadcom mega

Investors put their chips on Broadcom mega

Investors put their chips on Broadcom mega

Fresh off its plan to move to the United States, the semiconductor firm is weighing a $100 bln bid for rival Qualcomm, Bloomberg reported.

Broadcom is talking with advisers about a potential deal, which would be the biggest ever takeover of a chipmaker. Nothing has been hammered out yet and there's no guarantee that a deal will materialize. Qualcomm shares opened at $54.76 but shot up more than 12% on the news, valuing the company at roughly $91 billion. Broadcom rose 5.5 percent, for a market valuation of about $112 billion.

The saga kicked off almost a year ago, in January 2017, when Apple first filed a lawsuit against Qualcomm for allegedly abusing its market position to extract more money from hardware manufacturers.

The reports came one day after Tan held a news conference with President Trump to announce that Broadcom, now based in Singapore with a primary USA office in San Jose, plans to move its corporate domicile to the United States.

A Qualcomm spokeswoman declined to comment.

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Broadcom, based in Irvine, was acquired in 2016 by Avago Technologies, a Singapore based semiconductor outfit that has been growing through acquisitions - including LSI Corp., PLX Technology, Emulex and others.

At issue are the licensing fees that Qualcomm charges for patents that cover the basics of how mobile phone systems work. However, Apple may ditch Qualcomm altogether and develop future iPhone and iPad units that rely only on Intel modems, which would drastically affect Qualcomm's bottom line.

The deliberations come as Qualcomm, based in San Diego, California, tries to close its $47-billion purchase of NXP Semiconductors NV.

That would give it control of a big part of the supply chain of vital phone components such as wi-fi and cellular modem chips. The two companies are already among the top ten providers of chips ranked by revenue in an industry that's consolidating rapidly.

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