Broadcom (BRCM) is hoping to jump start its LTE chip business by buying Renesas’s LTE chip assets for $164 million. Japan’s Renesas bought the chip business from Nokia 3 years ago for $200 million, but decided a few months ago to sell the unit. Nokia had been its largest customer, and orders were weaker than expected as Nokia’s mobile phone business suffered.
With the Renesas assets in house, Broadcom says it will be able to make its first multimode, carrier-validated LTE system-on-chip platform available by early next year. Broadcom makes ARM-based applications processors as well as LTE modems, and is a direct competitor to Qualcomm.
“Today’s transaction firmly establishes Broadcom’s presence in the rapidly growing LTE market with a production-ready, carrier-validated SoC,” said Scott McGregor, president and CEO. “Our LTE platform will leverage Broadcom’s rich connectivity portfolio and will deliver an optimized feature set for this fast growing market.”
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Broadcom also updated its business outlook for the current quarter today, saying that revenue will be $2.075 billion to $2.175 billion, and that gross product margins will be 50 to 100 basis points higher than initially forecast.
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