This is supposed to be the biggest year in chip deals since 2000. The powerhouses of the industry that includes Broadcom Corporation, Intel, and many more are currently working on the future of technology. Internet of Things is the next big thing in the technology sector and more companies are trying to get opportunities to capitalize on it. It is believed that soon all devices in the world will be connected with each other one way or the other. And Broadcom is leading the race to win it. Recently, the company aimed to win by becoming partners with Avago.
Broadcom Avago deal was the talk of the city. The chipset industry has never been so busy and all semiconductor companies are focusing more on Internet of Things along with their big deals. Broadcom Avago as well as Intel Altera deal are making Internet of Things reality for users. Currently, all big name companies are focused on incorporating and integrating special functions for certain chips that handle low powered devices. Reuters wrote in its article “Bigger is better is the new mantra, as more technologies are being squeezed onto chips and customers want to deal with integrated suppliers that can offer the broadest range of products.”
Furthermore, the managing director at Credit Suisse, Ernie Ruehl stated that every company is wanting to become a supplier with having the most capability. This is more feasible for big companies as they can bear the ever rising manufacturing and designing costs. Credit Suisse advised the deal between Broadcom Corp. and Avago as well as NXP Semiconductors and Freescale Semiconductor which was the moment where ‘the current wave of chip mergers’ started to happen starting March. A tech analyst at IDC research firm, Mario Morales said “A leading-edge design can cost $150 million to $200 million, which means that you have to be able to generate four times the revenue to get a return on investment.”
Analysts believed that companies that are engaged in analog signal and mixed signal chips i.e. combination of analog and digital have more demand in the market. Hence the reason Broadcom, Maxim Integrated Products, and Silicon Laboratories etc. are under immense limelight these days.
But companies like Qualcomm and Intel are looking for opportunities to beef up and strengthen their stance in this market. Reuters reported that there are more deals coming through focusing Internet of Things. This will not stop in the near future.
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