Broadcom Pays $164 Million for Renesas 4G Wireless Chip Unit

Wireless chipmaker Broadcom said today that it will pay $164 million to buy the LTE wireless chip assets of Japan's Renesas Electronics.

Under terms of the deal, a team of chip designers based in Finland, the United Kingdom and India will become Broadcom employees, though the companies aren't yet saying how many people are involved. Bob Rango, Broadcom's executive VP and general manager of its mobile and wireless group, said the group of employees is largely composed of a batch of ex-Nokia chip designers who did some of the early work on setting 4G wireless standards. "This is a very experienced group of designers, many of whom were at the table when the 4G standards were set," he told me.

Broadcom had previously been seen as lagging rivals like Qualcomm in the development of chips for 4G phones.

Renesas had announced that it would stop developing its 4G wireless in June. Rango said the chips are already certified for use by several carriers, including AT&T in the U.S.; Vodafone, Orange and EE in the U.K.; and NTT DoCoMo in Japan.

Broadcom said the deal will cut into non-GAAP earnings to the tune of 12 cents a share when Broadcom reports its results of the quarter ending Dec. 31. It also expects the acquisition will cut into its fiscal 2014 earnings by 10 cents to 15 cents on a non-GAAP basis, but that it will be accretive to earnings starting with the 2015 fiscal year.

The company also boosted its outlook for the quarter ending Sept. 30, saying it now expects to report revenue in the range of $2.075 billion to $2.175 billion, and for gross margins to rise as much as 10 basis points.

Broadcom shares rose in premarket trading by more than one percent, to $25.51 per share.

3D Robotics Taps Qualcomm For $50M Series C And Mobile Tech

Qualcomm Third-Quarter Net Jumps 31 Percent on Mobile Chip Demand

Qualcomm Inc.'s fiscal third-quarter profit jumped 31 percent as the company reported strong growth in its sales of its wireless chips.

The company also raised the low end of its full-year revenue guidance and lifted its earnings view. It now expects per-share income of $4.48 to $4.56 on revenue of $24.3 billion to $25 billion. Qualcomm had previously projected earnings of $4.40 to $4.55 a share on revenue of $24 billion to $25 billion.

The San Diego-based chip maker has been one of the main beneficiaries of the growing popularity of smartphones, as it supplies wireless processors for a broad range of customers that include Apple Inc. and Samsung Electronics Co. and collects money from license payments tied to its technology.

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Fueled by Rise of LTE, Qualcomm Says 500 Phones in the Works Using Its Chips

The global adoption of LTE networks is helping Qualcomm win a spot inside hundreds of phones and dozens of tablets headed to market in the coming months.

"We are very excited about the types of devices that are going to come out," Qualcomm Technologies Executive VP Murthy Renduchintala said in an interview following the company's earnings report on Tuesday. Qualcomm reported results ahead of its forecast, and raised its expectations for the coming year amid stronger-than-expected phone business.

Renduchintala said that at least 500 Snapdragon-powered smartphones and 40 tablets are in the works. Some of that momentum has come as more and more wireless carriers are upgrading to LTE networks - a market Qualcomm has dominated.

New Snapdragon-powered devices range from high-end flagship phones to models aimed at boosting business in lower-end models destined for China and India. Qualcomm plans to announce several new efforts at those emerging markets before the end of the year.

"The holiday season is going to be a very exciting period for us," he said.

Two of Qualcomm's latest design wins were announced this week. Motorola is using Qualcomm's Snapdragon S4 Pro at the heart of the X8 processing engine that powers a series of new Droid models for Verizon Wireless.

Meanwhile, a Qualcomm chip is also powering the new Asus-built Nexus 7 tablet that Google announced on Wednesday. Renduchintala said to expect more tablets running a variety of operating systems to be announced using Qualcomm chips.

"You'll see a number of announcements come out over the next few months," he said.