MediaTek Inc (聯發科) shares yesterday shed as much as 2.19 percent amid speculation that the nation’s largest handset chip designer is Broadcom Ltd’s new buyout target.
The speculation came after Broadcom’s US$117 billion hostile takeover bid for US chipmaker Qualcomm Inc was thwarted last week by US President Donald Trump because of concern over national security.
After the Broadcom-Qualcomm debacle, the Singapore-based chip company has set its sights on Qualcomm’s nearest rivals — MediaTek, Xilinx Inc and Cirrus Logic Inc — as potential targets, the Chinese-language Economic Daily News reported yesterday.
By acquiring MediaTek, Broadcom would broaden its exposure to Apple Inc’s supply chain and enhance its 5G technological capability, the newspaper said, citing a report by the US-based The Motley Fool.
MediaTek was reportedly cracking into Apple’s supply chain by supplying modems for next-generation iPhones and iPads. Broadcom is a modem supplier to Apple.
The Hsinchu-based company also supplies smartphone chips to other leading brands, such as Samsung Electronics Co, Sony Corp, Lenovo Group Ltd (聯想) and Xiaomi Corp (小米).
Qualcomm controlled 42 percent of the world’s smartphone system-on-chip market in the third quarter of last year, while MediaTek had a 14 percent share, The Motley Fool reported, citing data compiled by Counterpoint Technology Market Research.
The Economic Daily News also said that MediaTek chairman Tsai Ming-kai (蔡明介) flew to Singapore last week to meet Broadcom chief executive officer Hock Tan (陳福陽), prompting further speculation that a deal could be under way.
MediaTek denied the report, saying that Tsai did not go to Singapore last week.
“It is entirely media speculation. MediaTek did not approach Broadcom to discussion the matter mentioned in the report,” MediaTek chief financial officer and spokesman David Ku (顧大為) said in a filing with the Taiwan Stock Exchange.
MediaTek shares yesterday ended 1.9 percent lower at NT$336 in Taipei trading, bringing the company’s market value to NT$531.22 billion (US$18.2 billion).
That would make it far cheaper for Broadcom to take over MediaTek than Qualcomm, for which it bid US$117 billion.
“It never came cross anybody’s mind that MediaTek would become Broadcom’s acquisition target,” a semiconductor analyst said on the telephone, requesting anonymity.
However, “anything can happen” in the rapidly changing global chip industry, the analyst added.
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