Semiconductors

Dealmakers contend with a boom being chipped away

14 Mar 2018

M&A practitioners gathering in New Orleans can toast the strongest start to a year since AOL and Time Warner connected in 2000. The annual conclave also coincides with the demise of Broadcom's $117 bln bid for Qualcomm. It raises prickly issues and also hints at cyclical excess.

China and U.S. trade places in 5G space race

14 Mar 2018

America is nudging Qualcomm into the role of a national tech champion. China is a potent rival, and has pushed home champs Huawei and ZTE into global leaders. The trouble is that Beijing is expert at bending firms to its will, while Washington is grappling to define its new role.

Qualcomm slays a lion, baits a dragon

13 Mar 2018

Having the U.S. government essentially declare it a national champion allowed the chipmaker to defend itself from rival Broadcom’s bid. But a rise in anti-foreign sentiment may hurt Qualcomm too – since it’s still waiting for China to approve its own $44 bln acquisition of NXP.

Three ways Broadcom tripped itself up

13 Mar 2018

While President Trump personally nixed the chipmaker’s $117 bln takeover of Qualcomm, Broadcom helped author its own failure. It failed to realize that chips are the new steel for national security. Its sheer hostility didn’t help. And boss Hock Tan was just too impatient.

Qualcomm deal delay hints at new tech nationalism

6 Mar 2018

U.S. authorities fear the $95 bln chipmaker could lose its innovative edge if acquired by rival Broadcom. Yet objections to a foreign buyer look like a fig leaf for the real message: Qualcomm is too strategic to be taken over by a suspect suitor, regardless of its nationality.

U.S. simplifies Qualcomm decision by complex means

5 Mar 2018

The foreign-investment watchdog has told the chipmaker to delay a vote that could give board control to nominees of Singapore-based Broadcom, which wants to buy its rival for $117 bln. It’s a surprising twist in a tangled situation. But it removes a big unknown from the equation.

Qualcomm slaps Broadcom with two Herculean labors

26 Feb 2018

The chipmaker laid down conditions for agreeing a merger – including boosting the proposed break fee to about $13 bln. Qualcomm is being reasonable but disingenuous. Its suitor would still have two very high bars to clear: raising the $120 bln price, and convincing regulators.

Viewsroom: Chipmaker battle fries M&A circuits

22 Feb 2018

Broadcom has lowered its hostile bid for Qualcomm after its target upped its longstanding offer for NXP. That decreases the chance the two larger rivals can strike a deal – assuming regulators wouldn’t nuke it. Plus: Credit Suisse shines a rare light on Asian investment banking.

Broadcom’s new Qualcomm bid both petty and smart

21 Feb 2018

The chipmaker is reducing its offer per share by 4 pct if its rival completes its sweetened acquisition of NXP. Sure, Broadcom would still be paying more in total. But the $4 bln price cut looks mean and lowers the odds the two sides can ever plug in a friendly transaction.

Qualcomm shows the strain with NXP bid hike

20 Feb 2018

Sweetening its offer for the rival chipmaker looks like an attempt to disrupt Qualcomm’s own suitor even as proxy advisers urge efforts to negotiate a deal. Broadcom’s $120 bln attempt to make a tech monster may yet fail, but Qualcomm’s board is becoming less of an obstacle.

Broadcom’s next sweetener: a bigger breakup fee

14 Feb 2018

The chipmaker's increased $120 bln-plus offer for Qualcomm has finally persuaded its quarry to talk. But the $8 bln of insurance Broadcom is offering in case antitrust regulators in Beijing or Washington block the deal probably isn't enough. History may justify twice as much.

Broadcom ups difficulty level for Qualcomm owners

5 Feb 2018

The chipmaker has raised its hostile bid to more than $120 bln. The merger is no more likely to pass antitrust review unscathed, though. And because Qualcomm’s owners would get roughly a quarter of the combined company, Broadcom’s overpayment becomes a serious risk for them.

NXP has Qualcomm over a barrel

31 Jan 2018

The larger chipmaker’s stock is close to Broadcom’s $105 bln hostile offer price. It might be because investors are warming to Qualcomm’s stand-alone worth. But that vision fades unless Qualcomm closes its own $38 bln deal for NXP. The danger now is raising its bid too much.

Chipmaker M&A exhibits increasingly fuzzy logic

29 Jan 2018

Amid a rash of big deals, Japanese firm Renesas may offer close to $20 bln for U.S. rival Maxim, CNBC reported. Combining the two could generate big savings – but Renesas would need to cut 100 pct of Maxim’s operating expenses to justify that price. That’s called overpayment.

EU makes Qualcomm bid more attractive, less likely

24 Jan 2018

Regulators fined the company $1.2 bln for paying Apple not to buy chips from its rivals. Such levies reduce Qualcomm’s potential profitability, and make a $105 bln bid from rival Broadcom more alluring. Yet it suggests trustbusters may look askance at the combined firm’s power.

Qualcomm slipping away from Broadcom’s grasp

19 Jan 2018

The odds were always long on the chipmaker’s $105 bln unsolicited bid. A new federal probe into Broadcom, Qualcomm’s progress with approvals to buy NXP and souring U.S.-China relations raise them further. Broadcom holds a few cards but its hand would be stronger played elsewhere.

Intel flaws hint at tech “too big to fail” risk

4 Jan 2018

Researchers revealed bugs in the firm’s processors, as well as those of AMD and ARM, potentially making most computing devices vulnerable to hacks. Chipmakers need massive scale to justify huge investments, but a concentrated market means problems can become systemic.

Apple exerts gravitational pull on chipmaker rise

4 Dec 2017

UK-based Dialog lost a third of its value on fears the iPhone maker will build its own chips. Rising sales of smart gizmos have boosted demand for semiconductors, and their makers’ stocks. Rosy valuations downplay the risks for a fragmented sector in a rapidly changing industry.

Broadcom fires board broadside from shaky platform

4 Dec 2017

The chipmaker is nominating 11 directors at Qualcomm, which has rejected its roughly $105 bln unsolicited offer. Only a brave shareholder would replace a board solely to advance a not-yet-financed bid. But the move pressures Qualcomm to engage before its annual meeting in March.

Meg Whitman’s good management of bad business ends

21 Nov 2017

She took over Hewlett-Packard when Silicon Valley's original success story was in unprecedented turmoil with three predecessors fired, a dysfunctional board and a welter of failed deals. By breaking it up, she brought stability. It's a track record that might work in politics.