In a report published earlier this week, investment bank JPMorgan has said that Apple is the prime candidate for acquiring Broadcom’s wireless chip businesses. The San Jose, California-based company is believed to be seeking bids for the businesses since it recently reclassified them as “noncore” assets.
According to JPMorgan, Broadcom’s wireless assets include three businesses that could be sold together or separately Those businesses are radio-frequency chips for wireless communications, Wi-Fi, Bluetooth and GPS chips, and touch controller and wireless charging application-specific integrated circuits.
In 2019, Broadcom’s RF chip business contributed $2.2 billion to the company’s revenue. As Apple continues its efforts to reduce reliance on Qualcomm, Broadcom’s RF chip business is believed to be of special interest to the iPhone maker.
“We believe that Apple could be a primary suitor among system (manufacturers) for the whole business, while MediaTek could be an interested party for the RF (radio-frequency) assets,” JPMorgan analysts said in a report Tuesday. “We also do not rule out a scenario where a financial investor could be an intermediary buyer, given high FCF (free cash flow) generation from these businesses.”
Broadcom is the current market leader in high-end power amplifiers and radio-frequency filters.