In the latestIPhoneIn X, the high pass chip allows the device to connect to the cellular network, while Broadcom components ensure that the device can detect mobile phone signals, but also to achieve the latest wireless charging function. In addition, the device is also equipped with some production module NXP, these modules for processing mobile payment transactions, but Qualcomm is the price of $47 billion acquisition of the company.
If everything is like the Broadcom plan, then the three suppliers will join together to become one of the world's largest chipmaker. The merger between Broadcom and Qualcomm technology industry will be the biggest deal ever, will lead to the great power of intelligent mobile phone on the supply chain together, which have a profound impact on the electronics industry.
Broadcom plans to buy Qualcomm at $70 a share, the largest maker of mobile phones, and the mobile phone market is around $105 billion. It is understood that Qualcomm board discussions, said Qualcomm may reject the takeover offer, because it believes that Broadcom quoted too low. A person familiar with the company's plans said that Qualcomm would not prevent Broadcom directly from the power of shareholders to achieve its acquisition purposes.
Broadcom CEO Chen Fuyang (Hock Tan) through a series of acquisitions, let his company joined the ranks of the world's ten largest chipmaker, but he shows no signs of stopping. Broadcom is also working to complete the network equipment manufacturers (Brocade Communications Systems) brocade acquisitions, but facing regulatory hurdles. In the last week, and President Donald Trump (Donald Trump) an event hosted by President, said Chen Fuyang, Broadcom will move its headquarters from Singapore migration to the United States, this move seems to please the officials, in order to promote the acquisition of more smoothly. At the same time, Qualcomm is seeking regulatory approval for its acquisition of Holland NXP.
In the acquisition of Qualcomm Trading, Chen Fuyang showed greater ambition. Based on revenues in 2016, Qualcomm and Broadcom will become the world's third largest chipmaker, behind Intel, and almost beyond Samsung electronics. According to market research firm IDC, last year only Broadcom's chip sales reached $15 billion 500 million, while last year's global chip sales totaled $337 billion.
Chen Fuyang said that he chose Qualcomm, because the company's position in the industry is unique, very important for the future. He said in an interview that his acquisition goals "both demonstrate that they have pure technological strength and the ability to add value to their customers."".
This transaction will take two of the world's largest Wi-Fi chip suppliers together, now Wi-Fi is a ubiquitous Internet access technology. Qualcomm occupies nearly 40% in the global smart mobile phone and mobile phone modem processor on the market share of these two chips are essential components of mobile phone manufacturing. Combine professional technology with Broadcom that will create a very suitable for the fifth generation (5G) wireless network technology and play a leading role in the company. Canaccord Genuity. Inc Group investment bank analyst Mike Wakely (Mike Walkley) said: "they will become the engine of 5G"
In the last few years, the chip industry has been rapidly integrated, which has reduced the number of key component vendors that electronics manufacturers are dealing with. Since 2012, the world's 10 largest chipmaker has accounted for more than half of the sales of the chip industry. In response, apple,Microsoft,AmazonAnd Google began to develop their own chips inside the company. This effort is not cheap. It takes years to design a single chip, and hundreds of highly paid engineers spend tens of millions of dollars.
Among the electronics manufacturers, Apple has made the greatest progress in developing its own custom chips. Even so, apple is heavily dependent on chip vendors. According to market research firm IHS Inc data, iPhone 8 devices, from Broadcom, Qualcomm and NXP chips accounted for about 1/3 of the total cost of the chip.
The ambition of these three chipmakers is not just limited to smartphones. Qualcomm hopes to acquire NXP, to enter the field of automatic driving of the horn sounded. Qualcomm will use between NXP and automobile manufacturers, which is the biggest supplier of modem car. Broadcom has also entered the automotive industry. It also sells wireless chips, fiber and sensors, and hopes to expand its business.
The data center is another target for Broadcom, because Facebook, Amazon and Google are building new data centers. Broadcom is a major supplier of chips for information flow between computers on the network. Qualcomm will soon sell its first batchThe serverThe processor challenges Intel's monopoly on the market.
Given the size of the deal, regulatory approvals will be complex, especially if clients are against the deal. Before Broadcom made the offer, apple accused Qualcomm of abusing its monopoly position in a series of lawsuits. The purpose of Apple's lawsuit is to reduce the amount of patent licensing fees that need to be paid to qualcomm.
Chen Fuyang said he and Qualcomm, NXP has a good relationship with customers. According to Bloomberg's supply chain analysis, apple is the biggest buyer of Broadcom products.
In addition, Chen Fuyang also focused on the development of another relationship, relationship with the United States President Trump. Not long ago, CEO of Qualcomm and he spent some time with Trump. Last week, in the Oval Office of the White House, Chen Fuyang and Trump stayed for a long time, Qualcomm CEO Steve Molenkopf (Steve Mollenkopf) trade delegation will attend Trump's visit to China this month. A good relationship with the U.S. government level, may help them to achieve the goal.