Broadcom Corp. cofounder Henry Nicholas set his hopes high after the Irvine chipmaker announced a $37 billion sale in late May to Avago Technologies Ltd.
He told the Business Journal at the time that he hoped to overtake Santa Clara-based Intel Corp. for the title of the world’s largest chipmaker, an aggressive claim that could get some legs if one of the following scenarios play out:
Chatter is picking up on Wall Street and in tech circles that Broadcom’s Singapore-based acquirer is looking to bid on Marvell Technology Group Ltd., which competes with Broadcom on Ethernet transceivers and switches, Wi-Fi/Bluetooth combo chips and other areas. Bermuda-based Marvell posted $3.7 billion in revenue last year.
RBC Capital Markets analyst Mark Sue offered another intriguing possibility: Broadcom rival Qualcomm Corp. in San Diego, the second biggest chipmaker in the world, could make a run at Broadcom as investor pressure intensifies to split up Qualcomm, creating a patent licensing side and a chipset side.
Qualcomm needs to diversify its revenue stream beyond the smartphone market, Sue argues.
“[Qualcomm] needs to acquire assets for scale as well as acquire semi companies with a broader revenue base or even potentially make a counter offer for [Broadcom] which may help Qualcomm limit its reliance on the smartphones/handset market,” he wrote in a recent note.
If the Avago-Broadcom deal closes, the combined company, known as Broadcom Ltd., will have an estimated annual revenue of about $15 billion. Broadcom last year had $8.4 billion, and Avago had about $4.3 billion for the 12 months ended Nov. 2.
A Broadcom-Qualcomm union would create a company with about $36 billion in annual revenue.
That’s still short of Intel, which posted sales last year of $55.9 billion, a figure that could bump up by at least $1.9 billion if its $17 billion cash deal for San Jose-based programmable chipmaker Altera Corp. is finalized in about the next six months, as projected.
Calling All Startups
San Diego-based EvoNexus, which is backed by Broadcom, Qualcomm and Irvine Company, among others, is now taking applications for emerging companies to enroll at its Irvine and San Diego locations.
The incubator—which has developed one of the largest networks of venture capitalists, angel investors, strategic partners, advisers, and entrepreneurs in Southern California—has 105 companies in its portfolio. It offers 40,000 square feet of office and lab space at three locations and doesn’t require startups to give up equity or pay fees for rent or services.
The application process closes Aug. 31.
Paragon Signs China Deal
Irvine-based Paragon Software Group Inc. has notched a design win with PortSys Inc. in Marlborough, Mass., to supply its Hard Disk Manager 15 product, which it says boosts peak performance in servers and workstations. The software will serve as a key backup and disaster recovery component for enterprise security.
The win builds on a five-year, multimillion-dollar deal signed with Shenzhen-based ZTE Corp. in May to license its universal file system driver for new-generation Android devices. ZTE is China’s second largest telecommunications equipment maker.
Paragon, which has about 15 workers locally and 200 companywide, projects $15 million to $20 million in sales this year.
