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Broadcom in Talks To Acquire Qualcomm

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Author: Jeff Powers
Created: 03 November, 2017
Updated: 21 November, 2022
2 min read

Broadcom Ltd. is planning an unsolicited takeover approach to rival chip maker Qualcomm Inc., according to sources connected to the deal.

If the deal is completed it would create the largest technology acquisition ever.

The news, reported by Bloomberg, would value Qualcomm shares at around $70. Investors immediately responded by sending Qualcomm stock up nearly 14 percent.

The bid comes as Broadcom plans to move its headquarters to the US from Singapore. President Trump and Broadcom Chief Executive Hock Tan announced the move at a joint news conference from the White House this week.

Broadcom’s acquisition would be the most ambitious move by Tan, who has turned a small, scrappy chipmaker into a $100-billion company with a string of deals, since he took the helm a decade ago.

QUALCOMM-APPLE FEUD

It's becoming increasingly clear that the relationship between Apple and Qualcomm may be coming to an end.

In a San Diego courtroom this week, the chip maker sued the technology giant for using its commercial marketing leverage to demand access to Qualcomm's confidential software, including, the suit alleges, source code.

This latest courtroom salvo is just the latest legal episode between the two companies that dates back years. It's not clear though if this could be the tipping point that ends the relationship.

More Choice for San Diego

Apple has not commented on the suit, but the company did start using Intel's modem chips in the iPhone 7. Adding more fuel to the fire, a report in Reuters this week that Apple was poised to severe its relationship altogether.

QUALCOMM CEO SAYS ISSUES "WILL BE RESOLVED"

Responding to concerns over the relationship, Qualcomm CEO Steve Mollenkopf, says the feud is a mere “dispute," downplaying the scale of the fight. “I think we’ll get through it, we have a very strong product relationship with (Apple). We sometimes have these disputes, but you have a broad relationship.”

Qualcomm has supplied Apple with wireless modems since the first iPhone. In return, the chip company has received royalty payments that reach as high as $30 per iPhone sold. That changed in 2015, when Apple began working with Intel.

Reuters is reporting Apple would drop Qualcomm’s chips altogether from its iPhones and iPads from next year.

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