Both Broadcom and Qualcomm have pending deals that could be affected by a merger. The unnamed sources also stressed that no final decision has been made, however, so there is still a chance for Broadcom to not proceed with a bid. This time the San Diego chipmaker is suing Apple for allegedly sharing proprietary Qualcomm technologies with its market rival, Intel. Broadcom's stock rose 4% to $271.09 a share.
- Broadcom is considering making a takeover offer for Qualcomm that would value the chipmaker at more than $100 billion, Bloomberg reported on November 3, citing people familiar with the matter. Broadcom itself was reborn in 2016 when Avago Technologies Ltd. acquired Broadcom Corp. for $37 billion.
Assuming Broadcom still decides to move forward with its $100 billion bid of Qualcomm, such a bid would give Broadcom significant leverage over components like Wi-Fi and cellular modem chips.
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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. Since then, though, smartphone sales growth has slowed and Intel has succeeded in placing its modems in some iPhone models. It is now incorporated in Singapore and co-headquartered there and in San Jose, California.
It's also unclear what such a deal would mean for Qualcomm's current bid of almost $40 billion to purchase NXP Semiconductors, a deal that's facing stiff regulatory reviews in Europe and opposition from some investors who contend the bid undervalues NXP. It has faced regulatory scrutiny in Europe, and some shareholders such as activist hedge fund Elliott Management Corp. have said the deal undervalues NXP, a large maker of automotive and other chips. The chipmaker countersued the Cupertino-based company in April, sought injunctions to halt iPhone sales in the United States and China, and filed a lawsuit over copyright infringement.
With the introduction of the iPhone 7 and iPhone 7 Plus, Apple brought in Intel for its LTE chips and there have been rumors that the iPhone manufacturer might also bring in MediaTek to bring an end to the business relationship with Qualcomm. The two companies are already among the top 10 providers of chips in an industry that's consolidating rapidly.