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Broadcom $ 130 billion acquisition of Qualcomm is full of hardcore and frustrated "drama"

via:雷锋网     time:2017/11/9 20:08:10     readed:536

But in addition to the huge amount of the acquisition, this possible transaction reached the semiconductor industry why change? What information do you have to know? What are the factors that block the success of this transaction?

First, Qualcomm you have heard, but Broadcom is doing?

The first thing that must be said is that the current "Broadcom LTD"Not before 2016," Broadcom Corp. "Because Avago, another semiconductor company in the United States, announced in mid-2015 that a $ 37 billion ($ 17 billion in cash, $ 20 billionstock) Of the price of the acquisition of "Broadcom (Broadcom Corp)."

Avago and Broadcom's businesses merged immediately and eventually became Broadcom LTD. This is why the current Broadcom stock code still follows the "AVGO" the direct cause.

Return to the question, then Broadcom what is it doing? Broadcom LTD in the latest quarter earnings, Broadcom itself is described as:

We are a leader in semiconductor design, specializing in devices that handle complex digital and mixed-signal, Analog III-V processor-based products. Our history has been with innovations, and we (and now) have provided thousands of products covering enterprise and data center networks, home networking, set-top boxes, broadband access, telecommunications equipment, smartphones and base stations, data centerserverAnd storage systems, factory automation, generation and replacement of energy systems, and even electronic displays.

This large and comprehensive positioning description may seem a bit complicated, more accurate description of the classification may be Broadcom in the earnings for their own business block. Overall it is divided into four parts -Wired network infrastructure, wireless communications, enterprise storage, industrial and others.

The four are probably of the same order of importance throughout Broadcom:

Perhaps you have no concept of these four directions, then take a look at this year's Broadcom Q3 earnings PPT in a page, describes the current four directions corresponding to the development of technology and market trends:

Wired network infrastructure:Cloud, social network, video streaming media; rapid development of large data applications; rapid iteration of home networks;

Wireless communication:Increasing number of advanced LTE devices; Increasing frequency of radio waves per mobile phone; Increasing demand for mobile device connectivity; High-speed Wi-Fi networks;

Enterprise Storage:Data centers, high-speed requests and bandwidth; dramatic growth in cloud storage; exponential growth in the digital world;

Industrial and Other:Increased factory automation; increased energy efficiency, new energy revolution; emerging markets.

According to Broadcom 2017 third quarter earnings,Cable network infrastructure business revenues 2.208 billion US dollars, net profit of 1.015 billion US dollars, wireless communications business revenue 1.283 billion US dollars, net profit of 492 million US dollars.

Together, these two businesses accounted for 78% of overall revenue, accounting for 62% of the overall overall profit of the four businesses.

In fact, cable infrastructure and wireless communications networks were also the mainstay of Broadcom Corp's acquisition prior to the acquisition of Avago in 2016, and Avago itself had some knowledge of wired infrastructure and wireless communications.

Eventually, Avago's enterprise storage, industrial and other businesses were retained, while the two businesses in the network segment had a "big consolidation."

This is actually the main reason for the merger, as Hualin CEO and now CEO Hock Tan said: "I believe we (Anwar and Broadcom) can add more value and become more important, Because our products are in the same area and have similar user groups. "

From the last acquisition of the intention to the current Broadcom business structure, and even the current performance of the corresponding business,You can more directly define Broadcom as a "wired / wireless network technology provider."

Second, do you really know what Qualcomm does?

Hear Qualcomm, some people may immediately say: "That is not my phone that processor brand?" That's right, because Qualcomm has always been the "high-performance mobile phone processor," the representative.

Since 2007, the Snapdragon processor has become a direct guarantee of the performance of many mobile phones, of which there are a lot of stories, but not all the focus.

Qualcomm's mobile phone SoC chip has long lead in performance (Figure from Anandtech)

becauseQualcomm's most terrible thing is its achievements in mobile network technology: It pioneered the earliest commercialization of CDMA (2G) technology, followed by the arrival of the 3G era, and successfully developed CDMA2000, EV-DO and other technologies. In the era of 4G, WCDMA was launched, and a more high-speed version of HSPA was released. Even the TD-CDMA technology promoted by China itself is partly derived from Qualcomm.

in other words,Qualcomm has always played an important role in the evolution of 3rd generation mobile communications technologies from the 1990s to the present nearly 30 years (your uncle will always be your uncle's series).

More importantly, there are many legacy content in these three generations of mobile communication technologies, and Qualcomm holds these key patents in hand and continuously studies new technologies and forms new patents based on these existing patents.

This piles of constantly updated patents have actually become one after another "dam", has brought huge amounts of income for Qualcomm.

Qualcomm revenue composition over the years, you can find the patent licensing business accounted for more and more high (Figure from Bloomberg)

Taking the data of Qualcomm just released in FY 2017 (Qualcomm fiscal year from the beginning of September last year to the end of September this year) as an example,Qualcomm chip product revenue this year reached a record 15.4 billion US dollars, the final 1.8 billion converted to net profit, while the patent license part of the revenue though only 7.66 billion US dollars, but the final net profit of up to 6.5 billion US dollars.

Such a special achievement and Qualcomm adopted by the special patent licensing model also has a direct relationship, the length of the relationship is not here to begin to say, but you can from the brightest comments in the market experience -"Buy baseband (communication module in the phone chip) to send chips."

High income also caused a lot of dissatisfaction with mobile phone manufacturers, from the domestic Meizu to a ride the apple, in fact, quite complain. In the latestiPhoneX, Apple even adopted basebands from different manufacturers in different versions of iPhone X sold in the United States (because the baseband is not loaded into the SoC by Apple, the baseband and the Apple A-Series processors can be flexibly combined).

But the end result is that the Intel XMM7480 baseband version, which was not implemented with the Qualcomm X16, not only lags behind the network in its professional evaluation of foreign media but also consumes more power.

In addition to the technical differences mentioned above, market share can also explain some issues. In June of this year, the overseas analytics organization Strategy Analytics published their statistics on the market share of the baseband market in 2016.

Qualcomm accounted for 50% of the $ 22.3 billion global baseband market in the year, far ahead of second-place MediaTek and third-place Samsung.

Considering that MediaTek mainly occupies the low-end market, and the low-end market itself has more devices, Qualcomm can account for 50% of the baseband market is already a very exaggerated data. Moreover, this is only the result of 2016, not the result of 2017, nor is Qualcomm's future achievements. Because Broadcom can not afford to buy 130 billion US dollars to buy a past.

So what is the future of Qualcomm? In fact, is a very simple addition -4 +1, which is the next generation of communication technology 5G.

Although as early as 2008, South Korea has started the world's first 5G technology research and development, but because of the continuous upgrading of 4G technology, 5G technology is also a corresponding late. So who is most likely to come up with a commercial 5G program?

Yes, the fastest way to go is Qualcomm. Less than a month ago, Qualcomm announced in Hong Kong that its Snapdragon X50 5G modem chipset completes the world's first 5G connection while enabling gigabit-rate data connectivity over the 28-GHz millimeter-wave band.

The miniaturization of the chip is also completed ahead of schedule, and even the prototype machine structure of the 5G technology test has also been released.

Snapdragon X50 5G modem chipset

This progress is what we can see the most "landing" is the most "commercial" 5G technology. Behind this achievement, Qualcomm is still strong technology and patent barriers in the support.

With the approaching 5G era, Qualcomm may again once again by virtue of its strong technology, once again repeat the 2/3 / 4G era code, the use of baseband technology in the mobile communications market to further expand its influence.

Third, the acquisition of another protagonist: NXP

Obviously the acquisition between Broadcom and Qualcomm, why will NXP pull it? Because just over six months ago, Qualcomm to NXP for 38 billion US dollars to the acquisition.

And in the Broadcom acquisition of Qualcomm, the former did not directly NXP as part of Qualcomm, but independent, which in fact expressly expressed a possibility: Qualcomm may not eat NXP.

Why does this happen? Let's move on to the rest of this article, but we must first look at NXP.

In Qualcomm's mid-April 2017 earnings release for the second quarter of 2017, it specifically referred to the acquisition of NXP: "NXP is a leader in high-performance, mixed-signal semiconductor manufacturers with a wide range of automotive and application areas Microprocessors, security identification, network requirements processing and wireless power supply have their own advantages. "

Although it looks a lot, NXP actually has its own focus - the car. Based on the data presented by NXP's own Analytical Day last April (from the SEC announcement)41% of NXP's overall product revenue comes from the automotive industryFollowed by 24% from Industry and Others and 15% from Mobile Communications.

NXP initially focused on the high-performance processors needed for ADAS (Advanced Driver Assistance) functions in vehicles, but has started to enter the autopilot platform market with a high profile since last year. The current direct competitor is NVIDIA.

In general,What NXP actually holds is a comprehensive and robust solution for the automotive industry, which is especially valuable when driving in a stormy atmosphere.




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