US chipmaker Broadcom is mulling a sale or wind-down of its R&D intensive cellular baseband unit to save around US$700m a year.
The Californian group, whose broad portfolio of products includes chips for satellite set top boxes and GPS receivers, has…
US chipmaker Broadcom is mulling a sale or wind-down of its R&D intensive cellular baseband unit to save around US$700m a year.
The Californian group, whose broad portfolio of products includes chips for satellite set top boxes and GPS receivers, has hired JP Morgan to carry out a strategic review.
Heavy competition in the smartphone semiconductor space has already seen similar baseband departures from groups such as ST-Ericsson, the ill-fated semiconductor joint venture.
Declining market share helped push revenues for Broadcom’s mobile and wireless segment – which represents nearly half of its total sales – down 15% year-on-year to US$856m for Q1 2014.
Strategy Analytics analyst Sravan Kundojjala said: “This announcement leaves Qualcomm, Intel, MediaTek, Spreadtrum and Marvell as the key players in the baseband market.
“It remains to be seen whether Broadcom will find a buyer for its baseband business as historically Freescale, ST-Ericsson, TI and Renesas Mobile all struggled to find buyers for their baseband businesses when they put them up for sale. ST-Ericsson and Renesas Mobile, however, found a buyer for a piece of their baseband business and we expect Broadcom’s attractive LTE roadmap could attract a player with market share expansion plans.”
He estimated that Broadcom had spent more than US$3bn on cellular baseband related R&D since 2007 without profit.
Broadcom was founded in 1991 and claims that 99.98% of all internet traffic in the home, in the hand and across the network crosses at least one of its chips.
