Broadcom Collaborates With Chinese Companies To Boost Presence

After Cisco, Broadcom joins the Chinese firm partnership bandwagon as a part of collaborative strategy.

It seems like Broadcom Corporation (NASDAQ:BRCM) does not want to be left behind in taking advantage of China’s rise from being a cheap industrial manufacturing base to a center of innovation and information technology. The semiconductor solutions provider has formed a strategic partnership with three local manufacturing organizations to strengthen its regional presence in the Asian country. The collaboration will involve further innovation of home entertainment and digital home category.

Qualcomm and Cisco have taken the lead, with the latter announcing its plan earlier this month to spend more than $10 billion over the next few years in the country. The road is not likely to be easy as China is tightening its noose around global IT enterprises for their alleged involvement in the cyberwar, spying, and espionage charges, following prior allegations. It now prefers local indigenous IT companies for procurement of IT services now. Likewise, Chinese IT companies struggled to get a foothold in the US market.

Due to Chinese officials’ preference for local IT companies, whom they can trust on, Broadcom has formed a joint venture with a Chinese IT infrastructure products maker, H3C Technologies Co. Limited, for further exploration on the IT infrastructure platform. In addition, Broadcom has also formed a partnership with StarTimes (Beijing-based pay TV operator) and Inspur Group (Shandong-based systems integrator).

With Inspur Group, Broadcom will collaborate on the provision of digital home system in the 4K Ultra HD set-top box offerings for China, whereas the partnership with StarTimes will be focused on the production of low cost set boxes through the provision of engineering resources and Ultra HD home gateways.

Like Cisco, Broadcom Corporation is eyeing on opportunities, such as healthy LTE revenue growth, data center, and the next generation video products in a bid to diversify to new markets, such as automobiles, Internet of Things, wearables set, and next generation mobile technology.

In terms of Internet of Things (IoT), the semiconductor company is already making good progress on that front, if not catching up with Qualcomm and other IT companies, and is currently refreshing its portfolio to come up with new and advanced, yet meaningful features of it.

The corporate giant already enjoys a significant position in market. This collaboration can further add to its market presence and boost company vitals (revenues, profits, turnover, etc.).

Broadcom stock price ended the day at $52.11, a decline of 1.50% from the previous day, despite the announcement of the joint venture.