Zhongguancun online news: Broadcom officially announced plans to acquire Qualcomm at $70 per share in cash plus stock price, its total transaction value of $130 billion.
If the sub-transaction can be reached, this will also become the semiconductor industry's history of the largest deal mergers and acquisitions.
Qualcomm is still evaluating the deal and has yet to respond positively.
Broadcom is currently the world's largest Wlan chip maker, while Qualcomm is a chip giant in the field of mobile technology, the combination of the two is bound to reconfigure the entire industry pattern.
Qualcomm is well known in the consumer market, while Broadcom is less well known in comparison.
Broadcom, a giant in wireless local area networks, is a major player in the semiconductor industry.
CEOScottMcGregor, former president of Broadcom, once publicly stated that 99.98% of the world's communications data transmission needs to be accomplished through at least one Broadcom chip, which is evident in its industry status.
Additionally, it should be noted that both companies are major suppliers to Apple, and have previously been involved in legal disputes over patents. Why would Broadcom at this point in time for the acquisition, the acquisition will bring to both sides after what?
These issues may be of the greatest concern to everyone.
Qualcomm is in the adjustment period or for the acquisition of the best period
In the 3G, 4G era Qualcomm is the industry's deserved king, and the 5G era, the high degree of unity of standards so that each mobile chip companies are back on the same starting line, in addition to Qualcomm, including Huawei, MTK, Intel and other companies are actively laying out the 5G, which has also produced a high-profile impact on Qualcomm. A certain impact.
On the other hand, the patent dispute with Apple has also affected Qualcomm's performance.
To just announced its fourth quarterly results, for example, due to patent litigation Apple owes royalties, its net profit of only 168 million U.S. dollars, the same period last year for the net profit of 1.6 billion U.S. dollars, a year-on-year decline of 89%, the last quarter for the net profit of 900 million U.S. dollars, a decline of 81%.
For this reason, Qualcomm's share price has fallen a cumulative 16 percent this year.
At present, Qualcomm's main income comes from chip sales and patent licensing, and the current patent licensing model has encountered considerable resistance in several major markets around the world, which is one of the main reasons for Qualcomm's recent poor performance.
Broadcom and Qualcomm share price comparison
But even so, Qualcomm is still a 5G technology pioneer, in October this year, Qualcomm technology summit, Qualcomm demonstrated the X50Modem, which realized the world's first 5G data connection, visible Qualcomm in the development of 5G has been ahead of the pace of the development of the company, which has a very broad prospects for development.
Small fish eat big fish? That's not true
Broadcom, now, may be much bigger than you think.
In 2015, analog semiconductor equipment maker Avago (Avago) for $ 37 billion in wholly-owned BROADCOMCooperation, then established BroadcomLimited.
According to related media reports, Avago's predecessor originated from Hewlett-Packard, which, in 1999, announced the split of its medical and test instrumentation parts and formed Agilent.
By 2005, Agilent split its semiconductor business again, and the famous private equity fund KKR bought it for $2.66 billion and renamed it independently as Avago.
In 2013, it fully acquired LSI for $6.6 billion and bought Broadcom in 2015, and in 2016, Avago acquired Brocade for a $5.9 billion
Avago's history
Broadcom's market capitalization has already surpassed Qualcomm's in terms of operations, and it's not a "snake eating an elephant" as we thought.
According to Broadcom Limited's second-quarter results this year, the company already has $5.4 billion in cash on hand, and the stock portion of the $100 billion acquisition will take up a higher share.
Dawn or dusk? Speculation after the success of the merger and acquisition
If Broadcom's acquisition of Qualcomm is successful, it is bound to have an impact on the entire industry.
In the field of mobile terminals Qualcomm's SoC in the processing chip and baseband has absolute dominance, and Broadcom's Wifi chip is also in the industry in a dominant position, including Apple, Samsung, Huawei, millet and other mainstream cell phone manufacturers are using Broadcom's Wifi chip.
If the two are combined, Broadcom will master the control of the most core components of the cell phone terminal, including AP, WIFI, Modem, get control, Broadcom will have a higher bargaining power in front of the OEM.
The follow-up Broadcom is likely to "package" in the form of OEMs to provide chips and technology, and the control of this package lies entirely in the hands of Broadcom, for OEMs to see the cost is to increase or decrease is not yet possible to determine.
From Broadcom's point of view, the merger is bound to bring more benefits to itself, while for OEMs or the entire market, the emergence of oligopoly is not a good thing, the lack of competition and technological monopoly will allow Broadcom to arbitrarily raise the price of parts, so that the cost of mobile terminals to increase.
At present, some industry insiders believe that Broadcom's acquisition of Qualcomm is likely to be subjected to antitrust investigations by the relevant departments and ultimately aborted.
The market can only innovate and develop with constant competition and checks and balances, and we also hope that the industry will have a healthier ecosystem in the future.
The company's name is Qualcomm, and I'm sure it's familiar to most domestic consumers.
Most people know a lot about Qualcomm because they use smartphones. But
For the sudden emergence of Broadcom (Broadcom) but some do not know, so what is the origin of this company?
What is the reason for the acquisition of Qualcomm?
Qualcomm is a global leader in wired and wireless communications semiconductor companies, Broadcom is also.
And Broadcom is one of the world's largest wireless manufacturing semiconductor companies, with annual revenues of more than $2.5 billion.
It got its start in computers and networking equipment and digital entertainment, and has since moved into mobile device manufacturing, making it a competitor to Qualcomm.
Saying the two companies are neck-and-neck is actually about right.
Qualcomm's Snapdragon chips are well known to consumers because Qualcomm's revenue and profits come from well-known companies, including Samsung, Intel and Xiaomi.
And in the field of smart phones, when marketing products, the high performance of Qualcomm Snapdragon processor will again be the various cell phone manufacturers will be loudly proclaimed, so the domestic consumers for Qualcomm's brand impression began to grow with each passing day, which is why Qualcomm is well-known in the country.
Broadcom's chips are mainly used to serve customers such as HTC, Apple and Google, and are especially suited to the performance of some small devices, so there is a big difference in terms of visibility and comparison with Qualcomm.
In the global semiconductor field, Broadcom is an anomaly.
Because from the scale of revenue, it and Qualcomm in revenue is not comparable, but in brand awareness is far from Qualcomm fame.
This can also be seen in the two companies acting style of the world of difference, Qualcomm belongs to the radical faction, do what will stir up a storm.
And Broadcom is more like a conservative, seemingly unknown, in fact, is a pig in a poke, muffled role.
Qualcomm suffered a Waterloo earlier this year, the company's shares continued to fall.
The wall fell down and Apple took the lead in filing a lawsuit against Qualcomm, followed by various cell phone manufacturers have joined the camp.
Also in this Qualcomm internal and external problems, Broadcom chose to "take advantage of the fire" like the acquisition of Qualcomm, chip maker Broadcom proposed to $ 70 per share in cash and stock to acquire Qualcomm, the total value of the transaction $130 billion.
According to Broadcom's proposal, the $70 includes $60 in cash and $10 worth of Broadcom stock. If the offer is approved, the deal would be the largest merger in tech history. The $130 billion offer for Qualcomm would include $25 billion in net debt.
Qualcomm's brand is often associated with Snapdragon Snapdragon chips, which are designed to provide performance in a range of VR devices such as the Samsung Galaxy S8, LG V30 phones and Daydream.
Consumers may not know the name Broadcom well. So what is it and why is it trying to acquire this troubled chipmaker?
Like Qualcomm, Broadcom Broadcom is a semiconductor company that produces chips and computer components for smartphones, laptops, data centers, set-top boxes, gaming consoles and more.
Qualcomm shares rose about 3.5 percent to about $65 a share, their highest level since January 2017, after rumors of a Broadcom takeover erupted on Friday.
Before the legal dispute, Qualcomm shares were trading above $70 a share.
It's worth noting that Broadcom Broadcom officials had announced plans to move its headquarters from Singapore to the US the day before the rumors of the proposed acquisition were released.