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Broadcom Corporation (BRCM)

  • Thu, Apr. 9, 9:52 AM
    • CNBC's David Faber has reported Intel (NASDAQ:INTC) has ended talks to acquire FPGA vendor Altera due to a failure to agree on price. That has fueled speculation Intel will make a bid for Broadcom (NASDAQ:BRCM), which competes with Intel in several telecom/networking chip markets and complements the chip giant's offerings in many others.
    • Also possibly helping Broadcom: Ladenburg Thalmann has launched coverage with a Buy rating and $51 target.
    • With a current $26.3B market cap - a buyout price would likely have to be over $30B - Broadcom would be a big fish to swallow. Q1 results arrive on April 21.
  • Thu, Mar. 19, 5:52 PM
    • After rising 5.8% in regular trading today, specialty analog/mixed-signal chipmaker Microsemi (NASDAQ:MSCC) is up 8% since announcing yesterday morning (just before its analyst day) it's buying Ethernet chipmaker Vitesse (NASDAQ:VTSS) for $389M. Shares have made new highs along the way.
    • Vitesse closed today $5.31, $0.03 above Microsemi's offer price. Ascendiant Capital's Cody Acree calls the offer "a bit low," and (given the deal is expected to be immediately accretive for Microsemi) thinks a rival bid might arrive. "Potential suitors could include Broadcom (NASDAQ:BRCM) or Marvell (NASDAQ:MRVL), who are already leaders in Ethernet and would see natural synergies in VTSS’s portfolio or Avago (NASDAQ:AVGO) who has also been particularly acquisitive."
    • Meanwhile, Stifel's Tore Svanberg has hiked his Microsemi target by $5 to $40 in response to the Vitesse deal and Microsemi's analyst day presentations (slides - .pdf). "[M]anagement reiterated its strategy to maximize profitability, grow its market share in core products, while expanding its [addressable market] through new product initiatives and deeper penetration into their existing customer base."
    • Svanberg adds the Vitesse deal "helps expand [Microsemi's] silicon/dollar content initiatives, especially in the comms infrastructure space and adds differentiated technology with high barriers to entry." He sees the purchase making Microsemi's goal of achieving a 60% gross margin and 30% op. margin in 2016 (compares with 56.2% and 24.4% in calendar Q4) easier to attain.
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  • Mon, Feb. 2, 10:13 AM
    • Intel (INTC -0.7%) is acquiring Lantiq Semiconductor, a German developer of modem/transceiver chipsets and SoCs for home/office broadband hardware and carrier access equipment. Terms are undisclosed; presumably, the deal will be paid for with offshore cash.
    • Lantiq's product line includes chips for DSL infrastructure gear, VoIP devices, GPON fiber-to-the-home networks, and DSL/Wi-Fi, Ethernet/Wi-Fi, and DSL/4G home gateways. The company has over 2K patents and design wins for hardware used on 100+ carrier networks.
    • Intel declares the acquisition will "expand Intel's success in the cable residential gateway market and broaden its offering to other gateway markets, including DSL, Fiber, LTE, retail and IoT smart routers," and that pairing Intel's cable modem/gateway chip ops (i.e. the Puma line) with Lantiq's tech and talent "can allow global service providers to introduce new home computing experiences and enable consumers to take advantage of a more smart and connected home."
    • Broadcom (BRCM -3.5%) isn't reacting well to the news. The company counts Intel as a major competitor in the cable modem/gateway and Wi-Fi chip markets (among others), and Lantiq as a major rival in the DSL and GPON chip markets. Shares rallied last Friday in response to Broadcom's Q4 beat.
    • The purchase comes six months after Intel agreed to buy LSI/Avago's Axxia network processor unit (competes against Broadcom and several other firms) for $650M.
  • Jun. 17, 2014, 6:58 PM
    • The consolidation wave that has hit the semi industry could soon yield tax inversion deals for foreign firms similar to deals seen in the healthcare industry, says FBR's Christopher Rolland.
    • Inversion deals allow U.S. companies buying foreign firms to see lower tax rates if less than 80% of the equity in the new company is owned by legacy U.S. shareholders, and the post-merger company has substantial foreign ops.
    • Rolland thinks ARM (ARMH), NXP (NXPI), Mellanox (MLNX), and Taiwan's MediaTek could be among the foreign companies targeted by U.S. chipmakers. Worth noting: Mellanox sells more than just chips, and ARM's business model depends on the company maintaining a neutral status within the industry.
    • Meanwhile, Nomura's Romit Shah names 15 potential M&A candidates, and divides them into 3 groups: "Sub-scale companies" with high margins and strong IP; "strategic companies" with compelling product lines; and "undervalued companies."
    • Shah's "sub-scale companies:" IDTI, ISIL, MTSI, MCRL, SMTC, SLAB.
    • "Strategic companies:" ALTR, AMCC, ATML, CAVM, MPWR, BRCM ($22.5B market cap could make it tough to digest).
    • "Undervalued companies:" DIOD, IRF, MSCC.
  • Jun. 6, 2014, 2:27 PM
    • Broadcom (BRCM +0.6%) has bought a unit of India's Ittiam Systems that specialized in improving Wi-Fi transfer speeds, the Economic Times reports.
    • The purchase comes as Broadcom faces tougher competition in its Wi-Fi/Bluetooth/GPS combo chip business from Qualcomm and others, particularly in the low-end/mid-range smartphone market.
    • The company still dominates the less cost-sensitive high-end segment, thanks in large part to major design wins with Apple and Samsung. Broadcom had an estimated 39% of the 2013 mobile connectivity market.
    • Shares +19% on the week due to enthusiasm about Broadcom's planned baseband exit.
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  • Jun. 2, 2014, 12:23 PM
    • After opening up 13% on news it's weighing a sale or wind-down of its baseband chip unit, Broadcom (BRCM) has pared its gains a bit.
    • One concern: Broadcom might little to nothing in a sale, given the baseband unit has been hemorrhaging cash and (as recently noted by CLSA) companies not named Qualcomm (QCOM +0.3%) or MediaTek have had a rough time turning a profit in the R&D-intensive business.
    • Broadcom is only 9 months removed from paying $164M for Renesas' 4G baseband unit. Since then, the company has reportedly scored 4G design wins, but has also warned of top-line pressures caused by 3G weakness.
    • Goldman notes Broadcom had only 4% of the 2013 baseband market (per Gartner), a tiny fraction of Qualcomm's 62%, and is set to lose share in 2014. The firm estimates Qualcomm gets a $0.02 EPS benefit for each percentage point it gains.
    • Goldman adds Broadcom has noted its low-end/mid-range combo chip sales could be pressured as more functionality gets integrated with baseband ICs; the company had 39% of the 2013 mobile connectivity market to Qualcomm's 20%. Likewise, Wells Fargo sees a baseband exit hurting Broadcom's combo chip position.
    • Texas Instruments, Freescale, and ST-Ericsson each wound up shutting down their baseband ops rather than selling them.
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  • May 12, 2014, 7:55 AM
    • TheMarker reports Quallcomm (QCOM) is in talks to buy Israeli chipmaker Wilocity for ~$300M. Wilocity is said to have given a notice of sale to employees.
    • Wilocity, founded in 2007 by ex-Intel employees, develops chips and related firmware for the nascent WiGig (802.11ad) standard, which aims to act as an HDMI/USB alternative by enabling transfer speeds of up to 7Gbps between devices within 10 meters of each other (a much shorter range than Wi-Fi).
    • The purchase would complement Qualcomm's Atheros Wi-Fi chip unit, which already has a partnership with Wilocity and has been grabbing share from Broadcom (BRCM) in the mid-range Wi-Fi/Bluetooth combo chip market - future combo chips with integrated WiGig seem likely.
    • Broadcom, which still controls the high-end combo chip space, also backs WiGig, as do Intel, Marvell, and Nvidia.
  • Aug. 1, 2013, 3:11 PM
    • Sources tell ex-WSJ reporter Jessica Lessin Apple (AAPL +0.7%) has acquired Passif Semiconductor, a chipmaker developing radios for the low-power Bluetooth LE (i.e. Bluetooth SMART) standard, which was created with embedded and wearable computing applications in mind.
    • Two weeks ago, the FT reported Apple is ramping its iWatch design/engineering efforts. Passif's chips are a logical fit for them.
    • The acquisition is noteworthy for Broadcom (BRCM +0.2%), given the company is the Wi-Fi/Bluetooth/GPS combo chip supplier for the iPhone and iPad, and has been developing its own low-power Bluetooth parts.
    • Pac Crest recently stated there's a growing risk Apple will abandon Broadcom in favor of home-grown combo chips, given Apple's hiring activity and Texas Instruments' $315M sale of wireless connectivity IP to an unnamed OEM (believed by some to be Apple). If Apple wishes to ditch Broadcom, Passif could provide one piece to the puzzle, but only that.
    • Update: Apple confirms it has bought Passif.
  • Jul. 10, 2013, 10:36 AM
    Emulex (ELX +2.5%) spikes higher after dealReporter reports the maker of server/storage adapter cards and controller chips is expected to receive strong M&A interest, including possibly from legal adversary Broadcom (BRCM). Shares now +21% since Bloomberg reported last week Emulex has hired Goldman to find a suitor. (Starboard Value)
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  • Jan. 2, 2013, 12:01 PM
    More on Apple: 1) Rumors are floating around that Apple is thinking of bolstering iOS 6 Maps by acquiring Waze, developer of a popular traffic/navigation app that relies on crowdsourced data. 2) Sources tell The Next Web Apple is partnering with Broadcom (BRCM +2.7%) to support the next-gen 802.11ac Wi-Fi standard in upcoming Macs. Broadcom already supplies Wi-Fi/Bluetooth combo chips for iOS gear. 3) Raymond James (Outperform) has lowered its March quarter iPhone sales forecast by 5M units to 37M, albeit while raising its Dec. quarter forecast by 2M to 48M.
  • Dec. 20, 2012, 9:20 AM
    Atmel (ATML) tries to tap a growth market by acquiring Ozmo, a developer of ultra-low-power Wi-Fi chips for the proverbial "Internet of things." Ozmo doesn't directly compete with Wi-Fi leaders such as Broadcom, Intel, and Qualcomm, but instead focuses on embedded devices such as speakers, thermostats, and remote controls, where low power consumption and small size are at a premium. Atmel notes Ozmo is a leader in Wi-Fi Direct solutions, which are expected to show a 100% CAGR through 2015.
  • Aug. 22, 2012, 9:30 AM
    Qualcomm (QCOM) is set to acquire Israeli chipmaker DesignArt Networks for $120M-$140M, Globes reports. DesignArt develops processors for 3G/4G base stations and mobile backhaul gear, and is a leader in the growing market for small base station chips. The purchase should help Qualcomm, which already has a sizable base station processor business, compete with rivals such as Cavium (CAVM), Texas Instruments (TXN), and Broadcom's (BRCM) NetLogic division.
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  • Jul. 17, 2012, 9:21 AM
    Samsung (SSNLF.PK) is acquiring the mobile phone connectivity and location chip ops of U.K's CSR (CSRE +34.1%) for £200M ($319M). The acquisition covers Bluetooth, Wi-Fi, and GPS chips, and is arguably a threat to Samsung supplier Broadcom (BRCM), which has long competed with CSR in these areas. It also provides Samsung with 21 patents that could be useful in its disputes with Apple. The deal comes 6 weeks after Samsung bought Wi-Fi chipmaker Nanoradio. BRCM -1.6%.
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  • Jun. 25, 2012, 1:40 PM
    Spreadtrum (SPRD -5.4%) and Broadcom (BRCM -5.5%) underperform on an ugly day for chip stocks (SOXX -2.9%) after MediaTek agrees to buy fellow Taiwanese chipmaker MStar for $3.8B. MediaTek and Spreadtrum are fierce competitors in the Chinese mobile baseband chip market, and Broadcom competes with MediaTek in both the baseband and Wi-Fi/Bluetooth "combo chip" markets. MStar also sells plenty of mobile chips, and that could be heightening competitive concerns.
  • Jun. 1, 2012, 9:11 AM
    Samsung (SSNLF.PK) has acquired Nanoradio, a Swedish developer of Wi-Fi chips for mobile devices. The deal reflects Samsung's efforts to internally source its mobile components as much as possible, and is a likely negative for Broadcom (BRCM), which is currently a major supplier of Wi-Fi/Bluetooth combo chips for the world's biggest phone vendor.
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  • Apr. 4, 2012, 4:24 PM
    PMC-Sierra (PMCS +8.5%) soared in late trading thanks to a report the telecom chipmaker recently held talks with potential buyers, though it's added a deal "is not considered imminent." PMC has been under pressure from activist firm Relational Investors to consider "strategic alternatives." Sources add rivals Broadcom (BRCM) and Marvell (MRVL) are "logical bidders" for PMC, though analysts think its exposure to legacy technologies such as SONET optical gear could be a problem.
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Company Description
Broadcom Corp is provider of semiconductors for wired and wireless communications. It provides a portfolio of SoCs that seamlessly deliver voice, video, data and multimedia connectivity in the home, office and mobile environments.