Ad
Ad
Ad
Ad
Electronics Production | January 07, 2011

Atheros acquisition enables Qualcomm to compete with Broadcom

Qualcomm's planned acquisition of Atheros Communications will position the combined companies to take on rival Broadcom in the burgeoning consumer electronics market for wireless connectivity semiconductors, according to iSuppli.

Wireless semiconductor giant Qualcomm today confirmed it will buy Atheros in a deal estimated to be worth about USD 3.1 billion. Qualcomm is the world’s largest supplier of semiconductors for wireless products, accounting for an estimated 22.4% of global wireless semiconductor market revenue in the 4Q/2010. Atheros ranks 12th in the market with an estimated share of 2.2%. "With Atheros adding only 2.2 percentage points to Qualcomm’s portion of the wireless market, this acquisition is clearly not a market share play for Qualcomm. Rather, it’s a pure strategic play, designed to bolster its position in the fast-growing wireless connectivity space now dominated by Broadcom", said Francis Sideco, principal analyst, wireless communications for iSuppli. Atheros’ main allure is its global leadership in low-power semiconductor solutions that support the 802.11n high-throughput wireless local area network (WLAN) standard, a type of Wi-Fi technology suitable for the transfer of bandwidth-intensive data such as video. Estimated Ranking of the Top 12 Suppliers of Application-Specific Semiconductors for Wireless Products in the 4Q/2010 (Ranking by Revenue in Millions of USD) After several quarters of effort, Atheros has experienced limited success selling its 802.11n semiconductors in the cell phone market. iSuppli’s Teardown Analysis service has identified Atheros chips in smart phones such as Samsung’s Galaxy 5 and Sony Ericsson’s XPERIA X10. Broadcom currently dominates the market for wireless connectivity semiconductors for consumer electronics, the so-called connected home area. This represents a booming segment of the wireless semiconductor business, with shipments of video-oriented consumer electronics devices equipped with high-bandwidth wireless solutions expected to grow to more than 85.2 million units by 2014, up from 606,000 units in 2009. However, Qualcomm is not alone in its efforts to position itself against Broadcom in this critical area. Other semiconductor suppliers eying the connected home market include Marvell Technology, Ralink Technology and Zoran. The acquisition of Atheros’ technology also could help Qualcomm to simultaneously defend against and attack Broadcom in its core business in cell phone semiconductors and help Qualcomm address the fast-growing market for tablets. "Broadcom has enjoyed major success with its connectivity solutions in cell phones, most notably the main WLAN slot in the iPhone. iSuppli believes it is only a matter of time before an EvDO and/or LTE iPhone will be introduced. It is essential that Qualcomm be part of the baseband picture for those types of phones due to its virtual lock on the EvDO market. Because of this, the company could be trying to expand its footprint by winning this slot from Broadcom", Francis Sideco observed.
Load more news
June 25 2019 8:13 pm V13.3.22-1