Apple supplier Broadcom is reportedly looking to sell one of its wireless chip units, and Apple itself could be a potential buyer. The Wall Street Journal reports today that Broadcom is working with Credit Suisse to find a buyer for the radio-frequency, or RF segment of its wireless chip business.
The report says that the RF unit brought in $2.2 billion in revenue during fiscal 2019, which means it “could be worth $10 billion.” Whether or not that number is “achievable” is unclear, and the process is at an “early stage,” the report notes.
Broadcom’s RF unit makes filters used in smartphones to clarify signals. Its technology is a “market leader” in the industry, but faces newfound competition:
The RF unit is a market leader in so-called FBARs—film bulk acoustic resonators—that are used in cellphones and base stations to filter out unwanted radio transmissions. But in recent years it has faced increased competition. One rival, Qorvo Inc., has developed an alternative filtering technology that’s tiny, reliable and can replace traditional FBARs.
Apple is already a major Broadcom customer, accounting for around 25% of Broadcom’s net revenue in 2018. Broadcom, however, is looking to better diversify itself with a focus on its more lucrative software business.
Today’s report doesn’t specifically mention any potential suitors for Broadcom’s RF business, but the writing is on the wall about Apple potentially being interested. Creative Strategies analyst Ben Bajarin points out on Twitter that Apple has already been researching doing its own RF technology, making it a “likely candidate” to purchase Broadcom’s business.
Apple is in the process of building its own in-house modem business, and recently acquired Intel’s smartphone business to expedite that process. An acquisition of Broadcom’s RF unit meshes nicely with Apple’s expanded networking projects. Whether Apple is prepared to spend upwards of $10 billion on the acquisition remains to be seen.
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