Broadcom is looking for a buyer for its wireless chip units as the company shifts focus on software. According to a post on the Wall Street Journal, Broadcom has partnered with investment services Credit Suisse Group AG to find a prospective client for its RF unit wing, which manufactures a wireless chip used by cell phone manufacturers to clarify signals.
The business generated $2.2 billion in revenue in 2019 and could be worth upwards of $10 billion, sources familiar with the business revealed. The report comes at the heels of Broadcom reclassifying its wireless units as outside the purview of its semiconductor business. During an interview with WSJ, Broadcom’s CEO Hock Tan referred to the wireless business as a standalone franchise that does not gel well with the company’s usual line of business. Broadcom is historically a buyer of networking, software, and semiconductor businesses.
Broadcom has adapted its business module towards software in the past couple of years. The company closed a deal to purchase Symantec’s enterprise solutions earlier in November 2019, in a massive $10.7 billion takeover. Broadcom earlier purchased CA Technologies for $18.9 billion in 2018.
Chris Caso, an analyst for investment banking firm Raymond James claims potential buyers for Broadcom’s RF chip unit include Qorvo, Qualcomm, and Skyworks Solutions. Caso claims Broadcom’s high band FBARs are the best in the business and will play a crucial role in the implementation of the 5G spectrum. However, Apple is expected to bid the highest for the RF chip unit, which already uses Broadcom parts in iPhones. Broadcom’s chips are also an integral part of Wi-Fi semiconductors, but since that business is on a steady decline, Apple is the likely contender to take it home.
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