Broadcom Offers $105B for Qualcomm in Landmark Deal | Hacker News Reader

Broadcom Offers $105B for Qualcomm in Landmark Deal

bloomberg.com

327 pointsadventured171 comments

Any reasonable antitrust regulation should kill it: https://www.economist.com/news/finance-and-economics/2172555...

Unfortunately they let those mergers happen: https://www.economist.com/news/business/21679810-frenzy-deal...

Shareholders benefit at the expense of everybody else (customers, employees, ...). Classical capital vs. labour dillema.

>> Any reasonable antitrust regulation should kill it

Yeah, do you know where we could get some of that?

I'd say Democrats but I'm not so sure anymore.

The Warren side of the party is in ascendancy. I wouldn’t be surprised to see this message pushed hard in 18 and 20.

Here’s hoping.

The third plank is a list of antitrust proposals in line with what Sen. Elizabeth Warren (D-MA) has called for the party to adopt. Facing rising corporate inequality and markets increasingly dominated by a tiny handful of firms, Democrats will propose a new federal office and federal guidelines that would aim to make it more difficult for companies to merge and easier for federal regulators to call attention to their “anticompetitive” behavior.

https://www.vox.com/policy-and-politics/2017/7/24/16017570/d...

Warren sold out to Clinton, Trump et al will use this to great effect. Clinton turned everybody that touched her into shit and that will be her enduring legacy.

The best opportunity for something true and meaningful like Justicedemocrats[1] to come and revitalize the Democratic party.

1) https://justicedemocrats.com/

Clinton to me is just par for the course politician, the difference being she failed to defend herself from an absurd volume of rhetoric from the Republicans.

So I would restate your sentence - "Republicans turned everybody that Clinton touched into shit."

Spend ten years tearing into any politician (they're still demonizing Clinton!) and I guarantee you'd find them in the same boat she is now.

Ten years? That Vince Foster bullshit started back in 1993. https://en.wikipedia.org/wiki/Suicide_of_Vince_Foster

If you consider the press and rhetoric she was getting for overturning death row convictions early in her career you could say they have been doing this to her for over 40 years. She is an intelligent woman and very effective as a litigator, which has made the right regard her as an extreme threat since they became aware of her.

I find it amazing and inspiring that she was able to survive politically and thrive despite ever-increasing smear tactics and baseless character gutting the GOP attempted on her. I find it sorely disappointing that after 40 years of it, the right finally succeeded in taking her down. Regardless of which side of the aisle I am on, as a feminist, I am awe struck by her and think she has done an unfathomable amount to advance the interests of women and all those resisting patriarchy globally.

I also hardly consider her a run of the mill politician. She brought the single-payer fight to the hill. She lost, but the current ACA had a lot of its legwork done by her efforts in 1992-1994. If we ever get single-payer, we will owe a lot of it to her.

Yeah, I believe people in Libya believe the same. It is always fascinating to see how much people bought to the media outlet rhetorics.

She is the only reason I totally abandoned the democratic party and went independent.

Well until the republicans realize that no one gives a shit about Clinton anymore.

I think history will be more kind to her. Hell, GWB has a positive approval rating among democrats now.

Modern democrats seem liberal on social issues, but not much else, unfortunately.

Democrats added antitrust to their 2018 platform. It's a bit milquetoast and avoids mentioning the big players but it appears to be a start. It'll be interesting to see whether it's a throwaway or if they might do something with it.

Probably depends on if we actually get grassroots, progressive Dems into office and force them into a more populist stance. We are also seeing the likes of Elizabeth Warren and Keith Ellison championing more progressive ideals and gaining popularity with the voter base.

Up to people to spread the word on these, if every person knew 1 or 2 progressive politicians (no matter which side, aka in relation to those regressive in the democracts and those progressive in the undemocratic aka the republican, party) and shared that with others there would sooner rather then later be a change - be the impact you want to see.

Adding something to the platform is a start, but as we've seen from the post-financial crisis era, there's a huge difference between having laws that should put bankers in prison, and actually having an executive with a desire to execute them.

Europe sells some, but we don't export much...

Yeah, regulation is one place Europe generates lot of employment. In other industries, not much.

Yeah, true except for cars, heavy equipment, trains, agriculture, banking.....

All on heavy subsidy from the states and unions of states..

It's ridiculous how democrat Hacker News is.

If all we do here in Europe is giving subsidies to each other and living off that, who or what is then creating all that value in the first place?

Debt. https://www.debtclocks.eu/public-debt-and-budget-deficits-co... Not that the US is any better...

Unlike the USA I suppose.

The popular vote was for Hillary Clinton by almost 3 million. 66 million Democrats vs 63 million Republicans, FYI.[1]

[1]http://time.com/4608555/hillary-clinton-popular-vote-final/

I was referring to the extensive subsidies and regulatory capture in the USA. I have no opinion nor do I particularly care about it being “democratic” or “republican”

> It's ridiculous how democrat Hacker News is.

Why?

Because the comment section gets terribly one-sided and emotional.

> It's ridiculous how democrat Hacker News is.

That's because it is international. What is considered "democrat" in the US is pretty much "obvious common sense" in the rest of the world.

Ralph Nader but joining the resistance gets you hunted down by the PR AT-ATs

How do we propose this happens?

You don't, that's the point.

It seems like the type of monopoly mentioned in the first article is "public monopoly" which is deliberately created by regional gov't. The telecomm industry is also heavily regulated, as is the finance/banking.

This is probably why Broadcom is pulling it's HQ move from Singapore to the US stunt right now. It buys favor with Trump, who appears to operate entirely based on favor and image rather than the rule of law.

How is that any different from any previous head of state? I guess they perhaps were better actors.

The flip flops trump has made between extreme statements then dial backs when people give him a few political points have far more whiplash than any US president that I can recall.

Which previous head of state appeared to base important decisions on who could make him feel the most special that day? Because whether I agreed with their politics or not, I can't recall one.

Dubya made decisions based on what he personally felt his religion was telling him to do.

Side effect of too much executive power. It's problematic that this is even possible.

The alternatives in the US are the judicial and legislative branches.

As opposed to the republican/conservative leaning Congress and Supreme Court (this could get pretty lopsided if something happens to Ruth Bader Ginsburg)?

For example, how many same party congressmen have come out against Trump who aren't planning on a job change or retirement?

Just a note. I'm not taking sides for any political party in my post. Just stating how things look to me in our current branches.

From what I understand, a foreign company purchasing a U.S. company is subject to some pretty intense review (CFIUS). By moving HQ to the U.S. they avoid that review process. It was planned before Trump but Im sure youre right and somehow Trump will help push this right through.

[Edit] Here is a story talking about it from last week. http://www.latimes.com/business/technology/la-fi-tn-broadcom...

> Any reasonable antitrust regulation should kill it: […]

Or, alternatively, any reasonable monetary system, under which a $120bn company isn’t able to sell the $60bn[1] of debt required to complete the acquisition.

[1] https://www.nytimes.com/2017/11/06/business/dealbook/broadco...

The debt would then be owned by Broadcom with Qualcomm.

Well, the market believes that the deal will not go through. The Broadcom offer is $70, and today's closing price is $62.

It's mighty weird to think of Broadcom as capable of buying Qualcomm. It'll be interesting to see if RISC-V activity increases after a merger like this. NXP has been a member, Qualcomm has been a member..

I don't think this really fundamentally changes the availability devices, or their leverage on the market (aside from Qualcomm's maneuvering becoming part of Broadcom's activities). I don't see why people in here are calling for regulatory involvement. This does not form any more of a monopoly than there already has been (on part of Qualcomm being basically being the sole enabler of LTE).

I'm glad you mentioned RISC-V. Even if that doesn't displace ARM or x86, it means every company can have their own CPU designs (RISC-V makes CPUs a commodity). That means the only remaining IP blocks of high value are graphics and wireless. Every other part of a SoC is either available or easy enough to develop in-house. Got that? Graphics IP will keep a company profitable for the next 5-10 years, and both these companies have basic graphics capability. Wireless will keep pretty much THESE TWO companies profitable for the next 20 years. Their merger would result in just one company that could build a complete phone on a chip without licensing much - if anything - from outside.

ARM basically made CPUs a commodity and Apple is still killing it by designing their own best-in-class version so I wouldn't be so sure about RISC-V.

Apple is killing it because of software, UI and walled-garden lock-in. Relatively little to do with their CPUs, great as they are.

(I know plenty of apple fans that would prefer an HTC or even Xiaomi phone if iOS worked on them, especially given the price difference.)

Apple refuses to sell their designs on the commodity market, so they can basically be ignored as a CPU/SoC vendor. Also, for what it's worth, Apple's CPU designs are not strictly "better" than the competition, they really just have a different target. Other vendors have more focus on dynamic and idle power, Apple seems to care a lot about single-core top line throughput.

That said, if you look at the way applications for Watch OS are submitted, you'll note that the submission format is LLVM bitcode, not machine code. This seems like an obvious and direct statement that they are willing to drop ARM at any moment for the Apple Watch. Something similar could (probably) be done for iOS.

Generated LLVM bitcode isn't architecture independent.

That is generally true, but it is more useful than machine code toward that end.

Not really. You'd have to go through the same motions. Either way it'd end up looking like later versions of MACRO-11 which treated PDP-11 assembly as a full language to be compiled for other architectures rather than just an assembler.

> Other vendors have more focus on dynamic and idle power, Apple seems to care a lot about single-core top line throughput.

If that's true, it's actually more embarrassing for the other vendors, since iPhones get comparable battery life to Android phones with batteries half the size.

Apples and oranges. The Apple phones get better battery life because of stricter app store inclusion rules and native binary builds for all targets instead of generic automated ports.

Plus the rest of the materials BoM on the phones probably cherry picks parts that are very efficient and tuned to work well with each other.

Why aren't Androids in this same boat? My guess is that it's because Samsung wants to release 10 different Galaxy phones a year to have something new and shiny in every product segment instead of focusing on one REALLY polished design and leaving last year's model for their mid/low end.

> Apple phones get better battery life because of stricter app store inclusion rules and native binary builds for all targets instead of generic automated ports.

Apple does just as well in comparisons that only measure the first party browser.

Apple wins in battery life because they sell $900+ phones and invest large sums in engineering specialized chips while Qualcomm doesn't sell phones, they sell chips to customers whose main concern is price.

... about single-core top line throughput.

As long as JavaScript is a thing, bless them.

> Other vendors have more focus on dynamic and idle power, Apple seems to care a lot about single-core top line throughput.

And a good thing, too. There are very very few OSes and apps that can properly utilise all the cores.

That said, A11 Bionic is already on par with a laptop CPU in both single-core and multicore performance [1][2]

[1] https://www.extremetech.com/mobile/256090-apples-new-a11-bio...

[2] It's true that it's peak performance, not sustained performance. But still...

Also here you go. Andes is putting out two RISC-V families (N25 and NX25).

https://www.eetimes.com/document.asp?doc_id=1332546

>> ARM basically made CPUs a commodity...

Definition of commodity: A reasonably interchangeable good or material, bought and sold freely as an article of commerce.

That's just one, but none of the other definitions I can find suggest any type of IP ownership or licensing model. Don't get me wrong, what ARM did was a great thing. I just think what's happening around RISC-V is even better.

Aren't good Graphics IP cores availble to licence from imagination or ARM ?

>> Aren't good Graphics IP cores availble to licence from imagination or ARM ?

Yes they are. But general availability at a price is not the same thing as free. I suppose ARM had made their CPUs nearly a commodity, but it's still not the same as open source designs available for free. Graphics and RF seem to be the last holdouts with more vendors offering graphics IP as far as I can tell - or at least having IP even if they don't license it. For RF you don't have much choice.

Most of the value of RISC-V will not really be in free designs though. The GPU is already a commodity because of higher-level standardization in APIs (Vulkan, OpenGL [ES]). It's just hard to design and build good GPUs, which means fewer players in the high end space. Vivante seems like the only really independent GPU design vendor, not sure if you can license Mali for a non-ARM design, you'd at least need to support their peripheral buses.

RISC-V is an instruction set architecture right? What do you mean by it will make CPUs a commodity?

It's royalty free, which (in contrast to ARM's long and expensive licensing process, or MIPS's) allows designers and manufacturers to more cheaply and fairly enter the market. RISC-V eliminates the last true bottleneck/point of control in the CPU market.

>> RISC-V is an instruction set architecture right? What do you mean by it will make CPUs a commodity?

Yep. The spec is publicly available for anyone to use. There are also several instances of CPUs that implement the instruction set available to download and incorporate into your designs at no cost. There are companies selling services to help integrate it into SoC devices and such.

Until now, if you wanted to put a CPU on a chip your choices were basically ARM, MIPS, and a couple others. You had to license the core from someone or pay to license the instruction set. Today you can integrate RISC-V with no royalties to anyone. Everyone can have a CPU on their chip.

In terms of performance, the available designs are already beating ARM in terms of power and area metrics at the same or better benchmark performance (at the low end). The BOOM cores (also available for free) are closing in on the ARM high end performance metrics. I have little doubt that a high end design could match or beat the performance of the best Intel or AMD chip, but that has yet to happen. My point is that it's not only freely available, but that it's also competitive with some of the best out there. That combination should make CPUs a commodity in the near future.

If anyone is still paying for a CPU license in 2020 I think they will have missed the boat.

>> The BOOM cores (also available for free) are closing in on the ARM high end performance metrics. ... match or beat the performance of the best Intel or AMD chip,

How does this happen, when many/most good ideas in cpu design(a mature industry) should be patented by now?

>> How does this happen, when many/most good ideas in cpu design(a mature industry) should be patented by now?

The RISC-V instruction set was designed to be free of any existing patent issues and with no specific implementation in mind. The opcode formats were designed with hardware implementation in mind however (minimizing the number of multiplexers and such). The big ideas in implementation have been around for a long time. Boom is a multiple-issue out of order core, but nothing about it looks particularly novel yet. It could still benefit from result forwarding and some other things, but that's an old concept too. I think lot of patents in processors tend to revolve around things that are specific to the ISA rather than broad concepts. The reason for that is that we've been making computers for 50 years now so many of the major concepts are rather old already.

I may be off base here too. I wouldn't be surprised if things like a micro-op cache are still patented, but I also wouldn't be surprised if that concept is 35 years old either.

It may be that getting top performance does require patented ideas, but I'd be thrilled if Intel or AMD gave it their best shot. It would probably perform better than their x86 offerings on regular code.

If anything it will harm availability of high quality devices as they have less competition to force them to innovate.

What a crazy turn of events. After all this M&A activity, Avago, a virtually unknown company, might end up owning Broadcom, Qualcomm, NXP and Freescale.

How is this even possible? Who is financing these guys?

How is Avago virtually unknown?

They derive from HP and Agilent Technologies, along with LSI. Pieced together originally by KKR & Silver Lake. Realistically it's a half century old entity. They then moved the corporation official seat to Singapore for various strategic reasons.

Calling Avago "virtually unknown" might have been too dismissive from my part.

But lets consider 2013. Avago had a revenue of $2.5bn, respectable, but that's not much when compared with Qualcomm's $24.9bn, less than Broadcom's $8.3bn, NXP's $4.8bn, and Freescale's $4.1bn.

In fact it seems that at least when it came to revenues, Avago was the smallest company on that list.

That's how leveraged buyouts work.

Pretty cool to see those revenue numbers. I assumed Avago would have been bigger revenue wise than NXP and Freescale (even with assuming you're using 2016 not 2013 revenue for them)

Can't charge taxes if it doesn't have revenue I guess.

How is Avago virtually unknown?

Unsure who you think should or would know Avago, but I am fairly certain they are far from a household name like HP is.

I mean, if we go "household name" then I highly doubt NXP, Freescale, Broadcom or Qualcomm would make that list.

People don't usually research who makes the chips in their doohickeys and gizmos.

Yea agreed - which is why it seems silly to even bring up.

Qualcomm has had commercials. Sometimes in pricey spots. They also have or had one or two stadium naming rights. So at least they'd be known by name (vaguely) by a decent percentage of Americans. Though would they know what Qualcomm does at all like even just "something with mobile devices"? No clue.

Not really a retort. Just Qualcomm is at least known perhaps more than all the other companies combined. As little as that's worth.

For those unaware, KKR is the leveraged buyout king made famous in "Barbarians at the Gate".

At least they are a tech company, not something like a water utility[1].

[1]https://en.wikipedia.org/wiki/Vivendi#Origins

Similar story behind JPMorgan Chase: https://www.jpmorganchase.com/corporate/About-JPMC/document/...

    The Bank of The Manhattan Co. had an
    unusual beginning. Burr led a group of
    New Yorkers, including Hamilton, in
    obtaining a state charter for a company
    to supply fresh water to the residents
    of Lower Manhattan. At Burr’s initiative,
    the charter included a provision
    allowing the company to employ its
    excess capital in any activity “not
    inconsistent with the Constitution and
    laws of the United States.” Burr then
    used that provision to start a bank.

That seems like a deliberate end-run round the company registration system from the get-go, rather than an existing operating company using it's capital to diversify.

Not all transactions need finance from someone.

LBO is a good example. Small company A can acquire a much bigger company B by pledging assets of B to take a loan to acquire B. This has been used to take a lot of companies private like Dell and even Avago before they were re-listed.

The other example is cash and share. Small Company A can offer to acquire bigger company B by offer x amount in cash along with y amount of stocks in the joint company. In this case, company A needs to only serve up x amount of cash. This was the case when Avago acquired Broadcom - $17 billion cash and $20 billion in shares for total of $37 billion. Avago needed to pony up only $17 billion in cash, rest was taken care by conversion ratios:

https://finance.yahoo.com/news/basics-may-broadcom-avago-mer...

The details of this offer are still not clear. Currently it is only an offer of cash and stock at $70 per share for Qualcomm. Currently, Broadcom has ~5 billion in cash and a huge amount of debt. There has been a lot of interest in the company's debt:

http://marketrealist.com/2017/02/how-much-broadcoms-debt-bur...

As the article says:

> The combined business would instantly become the default provider of a set of components needed to build each of the more than a billion smartphones sold every year.

This could give them monopoly on some of the transactions which they maybe aiming for. It remains to be seen if they will succeed.

Isn't an LBO financed by the bank making the loan?

Yes - although that financing in this example is based on the assets or cash flows of the company being acquired as well.

Interesting. All this consolidation in chip makers is going to hurt downstream device manufacturers. Apple and Samsung must be racing to make all the chips themselves before the Broadcom-Qualcomm giant can put the squeeze on them.

By the way, Broadcom's market cap is only $112B, so this must be either a highly leveraged buyout, or more of a merger in practice.

From the article:

"Apple contends Qualcomm is unfairly charging too much and illegally taking advantage of its market position in chips. To heighten pressure on Qualcomm, Apple has stopped paying the licensing fees and is planning to design devices that exclude Qualcomm’s chips, a person familiar with the situation has said."

Qualcomm's problem is with their patents licensing respect to competing OEM's, not necessarily with chips sales, which is really a side business, IMO. One regulator, KFTC, has found that Qualcomm's "no license, no chip" is a no-no, but why would Qualcomm want to sell chips to customers who have no desire to pay for licenses?

Apple has to pay Qualcomm license fee for their patents either way -- whether Apple buys chips from Qualcomm, Intel, or otherwise. Apple is already receiving significant saving -- their royalty is based on the manufacturing cost that Foxconn charges Apple -- or about 1/3 of the retail price.

Some of Qualcomm's licensing practices are quite troubling -- no license to competitors, for instance -- but, with respect to Apple's lawsuits, I don't think Qualcomm will have to change their per-device royalty basis.

Apple is already making their own WiFi and Bluetooth Chip. And this will have happen whether these chips maker were consolidating or not. As a matter of fact, arguably it is because Apple making their own chips, the most luxurious piece of market is gone, and they will have to consolidate to survive.

In a leveraged buyout, the resulting business will need to generate profit to service the loans, over and above whatever its overheads are today.

Apple would still have to pay Qualcomm, Nokia, Ericsson and other wireless patent holders whether they make their own chips or not. While Qualcomm's chip sales (QCT) isn't small, most of their profit comes from licensing (QTL).

Apple is working hard to pay the minimum amount possible to Qualcomm through lawsuits and exploring shopping more parts from Intel. It remains to be seen how that will pan out, but it has certainly caused enough analysts to price down their stock considerably lately.

Apple and others are already divesting from Qualcomm and have been for some time. This merger most likely won't affect this situation. Apple will most likely effect the merger. Imagine buying up a company that is going to soon lose one of, if not, its biggest customer.

>or more of a merger in practice.

This my thinking as well. Qualcomm's product portfolio is on par or beyond what Broadcom is doing. I imagine this is an "easy" way to suddenly get world-class ARM and cellular modem products and all the world-class talent behind those products.

Maybe this is also an admission that Broadcom can't compete going forward. From my own experience, Broadcom chips and their firmware are by the far the most buggy and poorest performers I've worked with. Broadcom is the only OEM I know of with "special instructions" to put their products in production. Using a hypervisor? Turns out Broadcom cant write VMQ code, so you need to disable that feature. Using a Broadcom N wifi chip, good luck, as its poorly compatible with others and has endless performance issues. Broadcom bluetooth? Get used to disconnects and interference issues.

This might be a "buy to survive" attempt by Broadcom.

If Samsung bought AMD, too, it would be so interesting to see the competition unfold between them, Intel, and Broadcom/Qualcomm. AMD is going to be a $30 billion market cap company within 5 years, so I think Samsung should hurry up and purchase it now for 1/10 of what Broadcom paid for Qualcomm and 1/3 of what Softbank paid for ARM.

When you look at the iPhone X teardown [1], you can see a number of custom Apple chips. And then you scroll down and see the Broadcom and Qualcomm chips that implement mostly the radio stack. What's to say those won't be Apple chips in the future?

[1] - https://www.ifixit.com/Teardown/iPhone+X+Teardown/98975#s182...

Broadcom and Qualcomm own significant patent portfolios covering things Apple would need to produce their own chips

This is true today but doesn't have to be in the future. Technologies change. Patents expire. There will be a 6g after 5g. I'm not sure who will own the patents on it. Most likely one of those two companies for sure, but you never know. Apple could invest the R&D and come up with something much better than we have today, and we all end up with Apple radio chips in our phones instead of Qualcomm.

Qualcom and Broadcom create prototypes even before standards are finalized so it is very difficult for an outsider to get in the game.

Apple created it's own 64-bit ARM chip before the specification was ready.

Technologies change by Qualcomm inventing new ones and patenting them.

Do they have both exceptional engineers + patent lawyers? Or is their IP stack purely through acquisitions?

they definitely had exceptional engineers in the past, irvin jacob and andrew viterbi practically invented cdma while everyone else was going with tdm/fdm based systems.

people used the exact same argument when transitioning to 4G, they hoped that Qualcomm could lose the 4G battle so they could pay less qualcomm tax. what actually happened?

For those interested in the patent landscape around mobile, this blog post has a rundown of the biggest patent holders for 5G-related technologies.

The biggest ones are Qualcomm, InterDigital (a NPE), Nokia, Ericsson and Intel.

http://www.ipwatchdog.com/2016/03/31/5g-mobile-networks-next...

Apple can license the patents.

But more realistically, Apple can buy Intel modems (as Intel already has a license with Qualcomm for LTE)

Does Intel have a license with Qualcomm? Why did they then go to KFTC and USTFC complaining about Qualcomm not licensing their patents to competing baseband makers?

Sounds like Apple should look at buying Qualcomm then, they could do half the deal in cash if they wanted too.

For the standards, the patents would almost assuredly fall under FRAND licensing terms (fair, reasonable, and non-discriminatory). Apple would still have to pay the license fees, but they already pay those.

As it stands, Apple already pays companies like Nokia and Qualcomm (until they started withholding licensing payments as part of the dispute) for use of their wireless patents. It seems that Apple making their own chips wouldn't change that situation. They license the patents now when using 3rd party chips, they'd license the patents in the future if they made their own chips.

hate to be a nitpick, but Apple doesn't have a license with Qualcomm. Instead Apple chose to outsource all their manufacturing and licensing to Foxconn whose licensing with Qualcomm predates Apple's iPhone release in 2007. In this particular case, Apple instructed its suppliers to make no further payment to Qualcomm. So I guess so long as Apple iPhone are made in China by those sourcing companies, their (indirect) licensing payment to Qualcomm won't change.

Apple could purchase both companies outright in an all cash deal and still have hundreds of billions in the bank.

Even in the US, I think _that_ would get squashed flat. Antitrust slam-dunk, no?

And most of those patents are under FRAND, hence why Qualcomm is selling itself to Broadcom now...

Patents mostly. Even if Apple made the chips themselves they would still be stuck paying royalties to Broadcom and Qualcomm.

Patents I'd expect, wireless stacks are patented to the hilt.

As I mentioned in anther post, Apple are already making their WiFi and Bluetooth Chip, W1 ( Bluetooth ) in Airpod, W2 ( 802.11n + Bluetooth 4.2 ) in Apple Watch.

So Apple has been testing a lot of things in their smaller volume products. Their next chip W3, will likely catch up to 802.11ac and Bluetooth 5.

Yes the processor that Apple makes is challenging to build but those other chips, like power management IC or audio codec aren't very challenging, relatively to the difficulty of implementing a good WIFI/LTE chip.

This seems like the sort of thing antitrust regulators should take a long hard look at.

Avago is acting like some kind of corporate raider: the only reason they had the money to buy Broadcom was huge bank loans:

https://www.reuters.com/article/us-avago-acquisition/avago-t...

Return of the LBO?

LBOs never left. That you're hearing about them now is simply because it's on HN.

Oracle bought Peoplesoft using an LBO for example. Dell is another high profile LBO/MBO.

In much more crude form.

What Hock Tan does is he gets ridiculous leverage, find near monopolist companies to buy, buys them, then quickly pays off debts by selling off almost everything from acquisition targets except for things needed to maintain that monopoly status.

Nothing smart in this scheme

Is it strange that Broadcom cut a deal to move HQ back the US at the same time it's buying a US-based company that would give it a near monopoly in the industry?

https://twitter.com/realDonaldTrump/status/92617682311707443...

Is Broadcom generally better than Qualcomm? The later is a really nasty company known for patent trolling and attacks on free codecs.

While normally this would probably mean less competition, buying out an obnoxious patent troll for patent disarmament can actually be a good thing.

For me at least, when it comes to laptops, a Broadcom-WiFi-Chipset is a critical factor in the purchase decision (as a 'DONT BUY!'). In the past Open Source drivers for 'Broadcom' were totally lacking. By now there are the brcm80211[0] drivers, wich kind of work, if you are lucky. With my last 2 laptops I wasnt so lucky, I still encountered constant disconnects and kernel-driver errors when working with them. The alternative was to use the reverse engineered 'b43'-driver wich kind of worked but never to my full satisfaction.

I don't really know about 'patent trolling' on Broadcoms side, but these driver issues were enough for me to say: never again broadcom, when you want to use it with linux.

[0]: https://wiki.archlinux.org/index.php/broadcom_wireless#brcm8...

On Linux, Intel WiFi drivers are by far the best I think. I wouldn't use anything else at least, because of the past experiences.

If you're satisfied with 802.11n then ath9k is IMHO the best. Only driver that does not require a magic firmware blob, and has all the bufferbloat reduction features.

For the record, Atheros is a subsidiary of Qualcomm.

Edit: wrong preposition

Yes, but Atheros was acquired by Qualcomm much later than the release of ath9k (2011 and 2008, respectively).

True.

Yeah, but I don't know any blob-less driver for 802.11ac. Which is weird really. Why can't they make their firmware open?

Absolutely this. I've had a couple of Dell Precision laptops running Ubuntu now and the one with a Broadcom WiFi chip was super frustrating. It's been a couple of years since that one but AFAIR, the connection would go down every 1-1.5 hours and you'd need to reload the relevant kernel module to get it working again. The other two have both had Intel WiFi cards and I've not seen similar issues.

As far as broadcom and intel drivers. Intel is definately superior. I have both chipsets in my devices, and I've had bugs in broadcom drivers cost me hours more than once.

The only reason Qualcomm is cheap enough for Broadcom to purchase is because of Qualcomm's disastrous SD810 chips that ruined many flagship devices in 2015. And that's all because they had to rush to the 64-bit market to chase Apple. So really, Apple is the cause of this (j/k)

It's funny how people say that Qualcomm was founded by engineers, since given they way they have acted in recent years, I had always assumed that they had been founded by lawyers.

I know Broadcom is no prize, but given that Qualcomm has laid off all of their kernel engineers working on the upstream kernel, and given the "quality" of their BSP kernels I have had the displeasure to have to work with (hint: one way to tell that your drivers are not upstreamable is when your BSP kernel doesn't even _build_ on x86), speaking purely personally, it's hard for me to shed a tear for Qualcomm....

I still haven't moved on from Freescale :(

Yes, it was. If you're talking about Irwin Jacobs, Andrew Viterbi, Franklin Antonio - yes, these were/are true, hardcore engineers at heart.... that was the impetus and backbone of Qualcomm. Everything that follows is the effects, which are far less interesting than its beginnings.

At many companies, the Founders push their biases into company culture so strongly that it stays for a long time. For example, my sister (who is an accountant, although now she's a director in the Finance and Auditing department) works at a company in the insurance industry that was founded by folks in Sales --- and it shows. Previously, she worked at Motorola, and that was clearly run by engineers. HP and Digital Equipment Corporation are also companies which have their engineering founders bias engrained into corporate culture for a long time. Although HP's more recent CEO's have not been engineers (for example Fiorina was a salesperson, and look what she did to that company).

But Qualcomm certainly seems to behave as if the Lawyers dictate all of their decisions, which has made me wonder if at least one of their founders was a lawyer.

Regarding the lack of upstream work, a former Qualcomm VP told me that the major reason they minimize any open source work is that their lawyers are paranoid that any accidental IP leak might endanger their patent-related revenue streams (80% of their pre-tax profits are from patent licensing). Given that patents are public information, I'm not sure I understand the exact logic there, but I've seen this general kind of legal paranoia play out before.

Their non-Android Linux BSPs are especially bad since they're frankensteined together from a subset of their AOSP tree with their only concern being to meet the minimal requirements of some high-volume customer contract.

The Android AOSP android-common kernel tree builds just fine on x86. The Qualcomm Android BSP 3.10 kernel didn't, and I had to do a huge amount of bashing and fixups before it finally could build on x86 (at least with a minimum configuration so I could run file system regression tests, since this was before android-xfstests[1] was a thing).

[1] https://thunk.org/android-xfstests

Rarely is it a good thing for the market when two behemoths merge. I hope regulators pay attention and don't just rubber stamp this.

My pet theory is that Apple is helping Broadcom since they apparently have a better relationship with Broadcom than Qualcomm.

Given there is Apple's money in both Western Digital and Bain Capital in the bid for Toshiba's NAND business. My guess is this take over will similarly have Apple's money in it as well.

Broadcom's previous aquisitions have not greatly benefited the hardware market. As a company they seem to be purchasing hardware manufacturers and the pace of advancement and quality of support then drops off a cliff for the acquired products. A good example of this is the LSI/Avago aquisition. Innovation in storage controllers had showered, the new Broadcom NVMe RAiD and HBA controllers offer very little change, and are more just a representation of existing technologies in combination.

Qualcomm had been fairly aggressive in it's developments and the overall quality of hardware in the mobile market has improved greatly because of it. Arguably, the ability of ARM to potentially unseat x86 as the supreme architecture is because of Apple and Broadcom's and rapid advancement of their chips. I don't Broadcom would offer us the same.

just a representation of existing technologies in combination

I don't shop in those markets, but combining existing technologies into one product can be a step in the march forward.

See the integration of the memory controller, northbridge, video codecs, and so forth into the CPU SoC. No one integration blew the doors of, but helped pave the way to the fast, low-power chips we have today.

Does not look good for mobile phone manufacturers if it goes through

I wonder if this would push Google to move into the smartphone SoC business, perhaps in collaboration with Intel, who already makes a NN processor in the new Pixel, an LTE modem for some recent iPhones, and obviously has CPU/GPU experience in x86 (and could probably design and fab a pretty competitive ARM core if they wanted to).

Google has the cash to do this, and their recent acquisition of HTC engineering talent suggests they are serious about pushing forwards as a high-end smartphone maker.

edit: Given more thought, I wonder if Google was already headed down this track. This mega-merger would only be additional incentive.

How'd that $13 billion Motorola buy work out for them ?

Great they mostly cared about patent portfolio the rest of Motorola was just a side bonus

They got most of the value back selling off the pieces. They kept the patents and a few other things. All things considered it went pretty well. At worst it was a minor side step and didn't do much to Google in negative ways.

Google buying Qualcomm? That could be interesting for sure, but I don't think that would happen.

If it wasn't clear, I was suggesting a Google-Intel design collaboration, and Google dropping Qualcomm from future products.

I don't think Google has any interest in buying Qualcomm.

Depending on how custom the "Pixel Visual Core" is, it appears Google may already have the intention

Good that samsung started making their own SOC, Mobile manufacturers should shift from qualcomm worldwide. They have almost monopoly in mobile SOC now. US and china are the only markets which require qualcomm patents to work. Mobile operators should move away from cdma. need more competition.

So even less competition in this space? Sounds great!

This reminds me of Porsche vs. Volkswagen

i only hope they end up named comcomm

How’s this for a new M+A regulation: make it illegal to increase the size of a patent portfolio by m+A. Not to say you couldn’t keep their patents, but that the total number of patents owned by the new company couldn’t be any larger than the larger of the two companies.

If the M+A causes the divestiture of even a significant number of low value patents, it could mitigate some harm.

That would likely have the unintended consequence of spinning off a lot of new non-practicing entities with a large number of low-value patents in their portfolios.

Are you sure that's what you want? Those companies are more commonly known as "patent trolls".

The optimist in me says that if you make the problem bad enough, we might actually get around to fixing it. Or, maybe instead of NPEs, it will be Native American tribes.

On second thought, let’s fix antitrust legislation and enforcement.

This is a compromise made to appease antitrust regulators in some situations, already. In a deal of this size, approval would likely require some patent portfolio compromises to get done.

Case in point the current Qualcomm acquisition of NXP. In that case, to satisfy EU regulatory officials, Qualcomm has agreed to give up some NXP patents (that must be sold) and agreed to not take legal action on some others, except for defensive purposes.

Who thinks Trump knew about this when he announced Broadcom will be relocating back to the USA.

"Qualcomm is preparing to fend off the unsolicited offer, arguing it undervalues the company, people familiar with the plans have said. Qualcomm will argue that the proposal is an opportunistic move to buy the chipmaker on the cheap, the people said, and it will likely recommend that shareholders reject it."

Qualcomm is feeling guilty over its anti-trust violations, just like multiple governments have found it to be. This is why its investors/board members want to get rid of it. I would hope that if Broadcom acquires them it also cleans house of Qualcomm's leaders and board.

A mouse tries to swallow an elephant

Even at $105B this would be a bad deal for Qualcomm and its shareholders. Long term Qualcomm will be worth probably double that offer in the next 20-25 years if current trends continue. Cashing out now would be very a short sighted move for shareholders

Qualcomm from the article isn't happy with the deal on their own.

Doubling in 20 years is only a 3.5% rate of return. That’s not great.

right now they are also paying dividend worth ~3% assuming they keep on doing this it would be 6.5% not bad..

Stock prices already account for expected future growth trends.

Reply on news.ycombinator.com