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Broadcom Explores Deal to Acquire Chipmaker Qualcomm
- deleted 9y ago[deleted]
- chollida1 9y agoThis might be a bit in the weeds but this is related to broadcom moving their head quarters back to the US. If you work in the merger arbitrage space you'll know about CIFUS, the US committee on foreign investment. Since the silicon space has had so many deals recently and is looking at more consolidation, moving their headquarters back to the US removes one possible legal obstacle to buying up other semi conductors chip makers as CIFUS won't review any deals where a US company buys another US company. I mean, broadcom's sweetheart deal with Singapore is almost over as well, so the financial benefits are probably over. That probably plays into their move as well:) If this ploy works, look for several Chinese companies to buy US companies and looking to do reverse takeovers to get a US address for their company to attempt to avoid the CIFUS review. http://money.cnn.com/2017/11/02/news/companies/broadcom-singapore-us-move-trump/index.html http://money.cnn.com/2017/11/02/news/companies/broadcom-sing...
- TheAdamAndChe 9y agoBeyond high level corporate jobs, would moving headquarters back to the US lead to more lower-class and/or manufacturing jobs? Or would the company just be based in the US on paper?
- reaperducer 9y agoThe company stated that it will expand its employment in the U.S. Mostly in research, I believe.
- adventured 9y ago> If this ploy works, look for several Chinese companies to buy US companies and looking to do reverse takeovers to get a US address for their company to attempt to avoid the CIFUS review. That's not how review works. They look at the ownership of the company in question. It's not enough to just pretend to have a US shell doing the buying, while it hides a Chinese government parent. For reference, according to the CEO of Broadcom, his company is ~90% owned by US investors. Just having a Chinese entity (whether Alibaba or a government corporation) holding a large ownership position in the company doing the acquiring, is enough to trigger review and a possible rejection depending on what's being acquired.
- foobaw 9y agoWhy wouldn't they just M&A? Just curious.
- deleted 9y ago[deleted]
- baybal2 9y agoBecause of Hock Tan's mentality, there is a long story to that
- martin1975 9y agoIt probably makes more business sense to do this mega merger/acquisition rather than continue to sue each other into oblivion over IP. The last settlement between QCOM and Broadcom was almost a billion dollar payment from QCOM to Broadcom... while that may not necessarily kill off Qualcomm, can't say it's not a major dent in their pocket after 4+ years of litigation.
- mtgx 9y agoThe only reason I would want this to happen is if Qualcomm's obviously terrible and anti-competitive leadership would get the boot. And then the whole company's abusive culture needs to be cleaned-up. Also, I wonder how serious Broadcom is about competing with Intel, and whether or not they would consider purchasing AMD, too, to aid in them in that effort. AMD's market cap is now only 1/10 of the price they intend to pay for Qualcomm, so it's almost a matter of "throwing some extra money on the table" at this point. Broadcom could use Qualcomm primarily for mobile and IoT, and AMD for desktop, servers, machine learning, and automotive.
- martin1975 9y agoI worked at Qualcomm in 2000-2001. What the heck happened since then? Seemed like a nice place at the time.
- spaceseaman 9y agoWhat always happens: $$$ Lots of growth occurred at Qualcomm since then. I'm assuming most of the leadership changed as the company became more and more profitable.
- sliverstorm 9y agoMy thousand mile view is simply that they entered some really cutthroat markets, e.g. the low end mobile chip market, and adapted.
- tsomctl 9y agoIs Broadcom significantly better?
- kogepathic 9y ago> Also, I wonder how serious Broadcom is about competing with Intel, and whether or not they would consider purchasing AMD, too, to aid in them in that effort. AMD's market cap is now only 1/10 of the price they intend to pay for Qualcomm, so it's almost a matter of "throwing some extra money on the table" at this point. AMD effectively cannot be bought. There is a termination clause in the cross licensing of patents between AMD and Intel for x86/x86_64 in the event either company is sold. [0] Anyone who bought AMD would immediately cause a huge issue for any company manufacturing x86 CPUs. AMD wouldn't be allowed to manufacture x86-based CPUs anymore, and Intel wouldn't be allowed to manufacture x86_64 CPUs. The only people who would conceivably benefit from such a situation would be patent lawyers who are probably already salivating at the mere thought of litigating that. [0] https://www.kitguru.net/components/cpu/anton-shilov/amd-clarifies-cross-license-with-intel-change-of-control-terminates-agreement-for-both/ https://www.kitguru.net/components/cpu/anton-shilov/amd-clar...
- quirkot 9y agotl;dr: deal is pending regulator approval of how many m's will be at end of combined company name
- Aloha 9y agoI giggled a little.
- brian_herman 9y agowww.3m.com/
- CalChris 9y agocomcomm?
- quirkot 9y agoI think BroadmmmQual has a nice ring to it (and far less misogynistic than the reverse)
- martin1975 9y agofunny, cause Quality Broad was the very first thing that popped in my mind... I must be the only one with a sexually charged imagination here ;)
- deleted 9y ago[deleted]
- dgaaaaaaaaaa 9y agoCommies Inc?
- deleted 9y ago[deleted]
- ausjke 9y agoBroadcom is awful for the open source world, it is worse than Oracle on the software side I think. TI/Freescale and to some extent Qualcomm are open to OSS. I hope this acquisition to fail.
- leoedin 9y agoThis would be my concern. Qualcomm is trying to buy NXP, who make a whole load of really great chips and microcontrollers (including everything made by Freescale). If the Broadcom attitude eventually makes it down to the NXP divisions, it could really ruin a good range of products.
- zanny 9y agoNeither are particularly friendly, just Qualcomm acquired an open wifi business and only slowly bled it into a proprietary firmware driver. Qualcomm is largely responsible for how proprietary and draconian most mobile phones are, though.
- ausjke 9y agotrue, Qualcomm was hostile to OSS, until it bought Atheros, and it kept Atheros open, so Qualcomm is only partially friendly to OSS.
- metilda 9y agoWhat are you talking about? Qualcomm is still hostile to free software, forcing binary blobs down your throat if you want to use an 802.11ac chipset. Ath10k might be open source, but everything interesting is hidden away by the proprietary firmware, like on Intel and Broadcom chips.
- bitwize 9y agoComing soon to HN: Qualcomm to be Acquired by Broadcom; Broadcom to be Acquired by Comcast
- squarefoot 9y agoDoes this imply that next Raspberry PI boards will be Snapdragon based?
- ksec 9y agoSo Broadcom wants to be your one stop shop for everything networking related? Server, Switches Controller, Bluetooth, LTE, WiFi etc. On the WiFi chip there is basically only three players left in the consumer market, Broadcom, Qualcomm ( Atheros ) and Mediatek ( Mediatek is actually doing surprising well ) Another point is Broadcom seems to have a very good relationship with Apple so far. If you look at all the iPhone taken apart there are lots of Broadcom chips in it. Off Topic: How do these Acquisition works? I get that it is a Share + Cash. The Share part is basically Qualcomm shareholder getting shares at the new company, but cash, we are talking about near 100 billion acquisition, where do the loans come from? Banks? Or could it be interest free coming from Apple?
- chx 9y agoWhat about Intel? I thought Intel has its own wifi M.2 cards.
- flyinghamster 9y agoNot just M.2; my motherboard (ironically, AM4+ based) has integrated Intel wifi and wired NICs.
- chx 9y agoWhile wired is typically integrated, wifi cards are rarely integrated, these days they are 2230 cards inserted vertically.
- wtallis 9y agoIntel has respectable market share among WiFi client adapters for PCs, but they're missing from the embedded/mobile client device space and from the router/AP space. Overall, I doubt they matter any more than eg. Marvell.
- kevin_thibedeau 9y agoBroadcom abandoned their IoT line last year in the sell off to Cypress. They don't have skin in the low margin embedded game any more.
- Kelbit 9y agoThere's a ridiculous amount of consolidation going on the semiconductor industry these days. Freescale (formerly Motorola) was purchased by NXP (formerly Phillips) in 2015. Qualcomm is in the process of buying NXP, although apparently there's been some difficulty getting it past the European regulators. Now it sounds like Qualcomm is going to get swallowed up by Broadcom. That's going to be a huge company. Last year, Microchip bought Atmel, ADI bought Linear Tech, ON Semiconductor bought Fairchild, and Renesas bought Intersil. The year before, Intel bought Altera. Any bets on the last two semiconductor conglomerates standing? I'm thinking Intel vs. Samsung. I hope whoever swallows up ON Semiconductor rebrands to the Fairchild name - there's almost something poetic about a reverse-Fairchildren split. EDIT: I should also point out that "Broadcom" isn't really Broadcom anymore - Avago Technologies purchased Broadcom last year and took on the Broadcom name for itself. Avago was previously the semiconductor division of Agilent which in turn was a spinoff of Hewlett-Packard. Avago traces its lineage back to the semiconductor division of HP which was formed way back in 1961.
- fungi 9y agoI guess anyone trying to buy Renesas would face regulatory issues.
- jjoonathan 9y agoI've heard that mergers aren't (legally) supposed to be anticompetitive, but I've seen the banking and semiconductor industries undergo a merger-fueled competition implosion in the last few decades, so obviously whatever mechanisms we have in place are laughably insufficient. As a voter, what keywords should I pick up on to fight the good fight?
- baybal2 9y agoChinese are just glad to have one big fish to swallow, instead of 20 small. Qualcomm and Broadcomm both spent enormous funds trying to enter Chinese market. Both ended up with Pyrrhic victories Qualcomm sold distribution deal for China to Allwinner guys where they chew into their already small margins - most Chinese smartphone makers simply do not pay "Qualcomm tax" Broadcomm bought few Chinese wifi fablesses, yanked up prices. Most Chinese soc fablesses just switched to own internal IP
- newusertoday 9y agolooks like someone who did not wanted this deal leaked it to media. why would one try to acquire it now when the nxp deal is still in limbo? would it not be better to complete nxp deal and then make acquisition offer? doing it now will create more regulatory hurdles.