Avago to buy Broadcom for $37B in biggest-ever chip deal

It is extremely disappointing that this is the top comment on Hacker News.

I'm assuming that quote is from:

http://www.forbes.com/sites/antoinegara/2015/05/28/could-ava...

Did the link originally point to Forbes? Why was it changed to the press release (it doesn't seem to hold as much information?)?

From the reviews in Glassdoor, it looks like the employees are not treated well in Avago and Avago's CEO has a very low approval rating. So this not a good thing for employees of Broadcom also.

Companies tend to accumulate multiple product lines. It seems Avago's strategy is to buy companies with high growth products, then sell off the less high growth product lines to others (which probably helps finance the acquisition to some extent).

Put another way, he's exploiting management's tendency to not focus on high growth products, by not selling off the profitable, but slower growing products themselves.

The result of this is that the high growth is diluted over a broader base revenue made up of slower growth companies... which lowers the companies value to investors (PEG is a common measure of the value of a company, which is combination of price, earnings and growth, so growth increases the multiple.)

If there were no friction this would be good, because the slower growing products will be merged with other companies who probably have the same product line, and then they can be combined to produce another generation that has the best of both previous companies products.

Alas, there is always friction in human things and thus this strategy has risk for all involved,

They also slashed a bunch of redundant divisions, I am told. I forget which teams, but for example "We already have a library team, we don't need another one, but we could really use this serdes group..."

Yeah, that's because the founder works for BC.

I had the exact same though, I guess time will tell.

The good news is they're not stuck with a single vendor, they could theoretically go to any company with an ARM license and get a compatible chip. If they were feeling ambitious they could even get their own chip made by someone like TSMC or Samsung.

I'm a bit more optimistic about Avago releasing more info on their SoCs.

It's not quite the same thing, but I've obtained datasheets for their optical mouse sensors rather easily - possibly because of their Agilent/HP heritage.

Trying to get anything from Broadcom is worse than "pulling teeth from a chook" - I've had better success with small Chinese companies like AllWinner.

TIL too. My response was: "what the heck is an Avago and how is it big enough to buy Broadcom?!"

I don't really get the trend of taking well-established brands and changing their name to something nobody recognizes. This gets me all the time with Leidos too (i.e. SAIC).

I am not sure that I understand what you mean with chipset vendor? In my view both Intel and Qualcomm are chipset vendors as well a "solution" consisting of multiple chips. Usually this is indicated in their reference platforms. For Intel that would be the CPU and the motherboard and for Qualcomm that would be their handset reference platform.

Aside from that, the new company will be really big even after divisions have been sold off.

One thing I'd love to see one day would be a timeline/lineage graph of (silicon valley) tech companies. It is pretty colorful how the companies have variously both spun off and merged while still maintaining relatively strong history that usually can be traced to few key places (e.g. Fairchild)

Given past experience with both Avago and Broadcom, I don't think I would hold your hopes too high; I would bet money that the current attitude you get from Broadcom about drivers will continue if not get worse. Most vendors in the hardware sphere tend to be rather protective of everything they do (fairly or unfairly), and pretty old school,and that sort of attitude doesn't really play well with our open source/libre desires for more transparency in things like drives.

"no no no, you're not being laid off oh heavens no, you're being 'synergied" now give me your key fob and get out" ...

You should expect this trend to continue. Semiconductors have become a hideously expensive business, aggravated by fewer fabs and more draconian fab/IP acquisition costs. It's a well known that nobody on Sand Hill road will touch semiconductor startups at all, leading to a stagnant collection of semiconductor companies founded 20+ years ago. There was recently announced a semi-only incubator here in SV[1] because nobody can raise any traditional VC money, although time will tell how many successful exits it will have.

[1] http://www.eetimes.com/document.asp?doc_id=1326501

It's far easier to build a start-up doing software than pretty much any hardware, so current giants have a huge advantage over anyone trying to break in. Consider for a moment that a new fab with a recent process is probably a many billion dollar investment, and that even fabless semiconductor companies (a la LSI, recently) there are huge amounts of IP, capital, and brain power tied up; everything also really needs to be really correct up front, and tooling is expensive (you wouldn't want to waste millions of dollars building a chip that's really unproven and undesired from a market perspective). Even technologies with less expensive (though not at all cheap) tooling, like hard disk drives, the IP is so tied up with the current giants (WD/HGST/Seagate), and the firmware needed to make the drives work at current capacities is so complex, that it is essentially impossible to break into the market.

The only notable recent entrant I can think of is Spreadtrum from China. But I don't know that it counts as a startup when it is backed and partially owned by the Chinese government.

Capitalism at work. Collusion, consolidation and no competition.

At Broadcom? I'd echo that, the late 1990s and early 2000s were definitely when they were undergoing radical growth. They tended to pay lower wages but everyone was okay with it because they were making tons on the stock. I never worked for them but worked closely with them. They had an intensity about them...

It seems like they've lost a bit of their mojo, everyone, it seems, builds custom ARM chips now... Back in those days they could pretty easily target a vertical, graft a few chips together and sell a specialized solution that was pretty compelling.

They'll have absolutely no problem with it.

Avago is an American company masquerading as a Singapore company. It's controlled by US money, and it also has a joint HQ in San Jose.

1) "The company was founded in 1961 as a semiconductor products division of HP. The division separated as Agilent Technologies in 1999"

2) "KKR and Silver Lake Partners acquired the division of Agilent Technologies in 2005 for $2.6 billion and formed Avago Technologies"

3) Major shareholders: JP Morgan, FMR, Blackrock, Capital Group, Vanguard, etc. - it's almost entirely controlled by US money interests.

Funny money in both cases. Facebook is more than happy to give "value * x" in stock - because at the end of the day, stock is monopoly money.