Shares of Qualcomm Inc jumped nearly 13 percent on Friday after unconfirmed media reports said rival computer chip giant Broadcom Ltd might make an unsolicited takeover bid.
Broadcom is considering an acquisition plan, which it could put into motion as soon as this weekend, the Wall Street Journal reported, citing an unnamed source it said was familiar with the matter.
Shares in Qualcomm closed up 12.71 percent to US$61.81 on the NASDAQ exchange, valuing the company at US$91 billion. That could make the deal the biggest ever in the technology sector.
Broadcom shares also gained ground on the NASDAQ, rising 5.45 percent to US$273.63, valuing the company at more than US$116 billion, in a possible sign that the market saw merit in the acquisition.
Bloomberg News, citing anonymous sources, said Broadcom could soon launch a bid of more than US$100 billion for Qualcomm.
“It’s a smart move that would make Broadcom into a tech juggernaut,” GBH Insights LLC analyst Daniel Ives said.
News of the deal came a day after Broadcom chief executive Hock Tan (陳福陽) appeared at the White House with US President Donald Trump to announce plans to move the tech company back to the US from Singapore. The company is currently incorporated in Singapore and co-headquartered there and in San Jose, California.
Qualcomm, an early pioneer in mobile phone chips, supplies so-called modem chips to phone makers such as Apple Inc, Samsung Electronics Co and LG Electronics Co that help the phones connect to wireless data networks. Broadcom is also a major supplier to many of the same companies for Wi-Fi chips.
Broadcom’s Wi-Fi chips are essentially a commodity and priced much lower than the modem chips.
The only other major supplier of high-end chips is Intel Corp, which supplies about half of the modem chips in Apple’s iPhones. Purchasing Qualcomm would give Broadcom a much more lucrative line of business in the mobile phone markets.
Qualcomm declined requests for comment, while Broadcom did not immediately respond.
The potential tie-up signaled consolidation in a sector that produces chips for smartphones and an array of other devices connected to the Internet of Things.
It comes as Qualcomm seeks a US$47 billion acquisition of Dutch rival NXP Semiconductors NV, a deal that is the subject of an EU antitrust inquiry.
Meanwhile, Broadcom is seeking to buy US rival Brocade Communications Systems Inc for US$5.5 billion, a deal being reviewed by the Committee on Foreign Investment in the US.
Qualcomm was fined more than US$770 million in Taiwan last month for abusing its market dominance. It is facing similar challenges in several countries, including the US. China and South Korea have already imposed heavy fines.
In the US, Qualcomm is locked in contentious patent battles with fellow tech giant Apple Inc, which filed a lawsuit in January accusing the chipmaker of abusing its market power to demand unfair royalties.
Additional reporting by Reuters
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