Broadcom is reportedly interested in purchasing Qualcomm


According to a report in the WSJ, Qualcomm, now embroiled in a number of lawsuits with Apple, is apparently about to receive an unsolicited takeover bid from semiconductor designer Broadcom. Qualcomm is known for its Snapdragon chipsets used to power many smartphones. Well, Qualcomm happens to be in the middle of an ongoing existential crisis perpetuated by a legal showdown with Apple, which has always been a Qualcomm buyer for wireless modems that enable the iPhone to communicate with telecom networks. Yesterday it filed a suit against Apple in a California district court claiming that Apple breached its contract with Qualcomm by trying to pass information about Qualcomm's modem chip to other Apple employees who were working with Intel's component. Broadcom shares rose nearly 5 percent, for a market cap of $111 billion. Qualcomm, in suing Apple, says it is not obligated to license those like to does with industry standard technology. Qualcomm, a major supplier of chips for wireless handsets, was up 14 percent.

At issue between Qualcomm and Apple are licensing fees the chipmaker charges for patents that cover the basics of how mobile phone systems work. Both Broadcom and Qualcomm have pending deals that could be affected by a merger. Broadcom fell slightly to trade up about 1 per cent, for a market valuation of $107-billion.

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.

Broadcom, created in 2016 when Avago Technologies Ltd. acquired then-Broadcom Corp. for $37-billion, said this week it will return its headquarters to the USA from Singapore.

Qualcomm declined to comment, while Broadcom did not immediately respond to a request for comment. As such, if Broadcom were to own Qualcomm, the resulting entity would be in a better position to negotiate with the likes of Apple and Samsung.

San Diego-based Qualcomm the target of an unsolicited takeover bid by Broadcom Ltd. Qualcomm paid $891 million to settle the case in 2009.