Irvine-based chipmaker Broadcom Corp. is said to be in settlement talks with rival Qualcomm Inc. that would end more than three years of legal sparring over cell phone chip patents.
In an unusual move, San Diego-based Qualcomm said after the close of trading that it will delay its quarterly results until Monday because it was enmeshed in “advanced settlement discussions” with Broadcom.
“A global settlement of all disputes between the parties which, if reached, would have an impact on the company’s financial results for the fiscal second quarter,” Qualcomm said in a statement.
Broadcom’s shares rose nearly 10% in New York afterhours trading on a recent market value of $11 billion.
Investors were likely spurred on by the talk about a settlement after some analysts had raised concerns about the cost of the legal fights taking place in both Santa Ana and San Diego courts.
In the past two years there have been a handful of false starts about a possible settlement that resulted in either Broadcom or Qualcomm shooting down the talk as rumors.
There’s no guarantees that today’s talks will result in a settlement, according to Qualcomm.
Both companies declined to comment further about the matter.
Broadcom and Qualcomm have been fighting in court and before trade commissions since 2005.
Beyond patent violations, Broadcom accuses Qualcomm of unfair business practices, discriminatory licensing and violation of industry standards by concealing its patents.
Qualcomm has fired back with multiple appeals and patent suits of its own.
Behind the dispute is Broadcom’s bid to win more business supplying chips to makers of cell phones.
Right now, it’s a small cell phone chip player behind Qualcomm and Texas Instruments Inc.
