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CLSA upgrades Broadcom to Buy following Renesas deal

  • Analyst Srini Pajjuri sees the purchase of Renesas' 4G LTE baseband chip unit eventually allowing Broadcom (BRCM +1.9%) to become "a viable second source in LTE" after Qualcomm (QCOM +0.9%), an to thereby (as a result of being able to offer more comprehensive solutions) "stem potential share losses" in the Wi-Fi/Bluetooth combo chip space.
  • Strategy Analytics estimates Qualcomm had a 97% share of the LTE baseband market in Q1, as the company's big head start in offering multi-mode (2G/3G/4G) basebands and (through the Snapdragon line) integrated baseband/app processors continues paying dividends.
  • However, Broadcom, Nvidia, and Intel are all prepping multi-mode LTE basebands, and are looking to have them inside OEM hardware by early 2014. Broadcom says the Renesas deal will speed up the arrival of its LTE baseband, and also provide it with patents and top mobile engineers. Qualcomm is looking to stay ahead with the help of its Snapdragon CPUs, strong multi-band support, and 4G RF front end.
  • Broadcom still dominates the combo chip market, but Qualcomm has scored some noteworthy design wins lately.
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