Mobile phone chip market accelerates shuffling: TI Broadcom has withdrawn

The once-popular mobile phone chip business is rapidly cooling down. After Texas Instruments announced its withdrawal, Broadcom also played a retreat.

On June 2, the US-listed Broadcom announced that it would abandon its mobile phone baseband chip business and seek to sell or close it. Because the abandonment of this part of the business can save the company $700 million in annual expenditures, this positive news stimulated Broadcom's share price to rise more than 10%.

The explosive growth of smartphone shipments has driven the rapid development of the mobile chip business of chip companies such as Broadcom and Texas Instruments. However, with the advent of the 4G era, the mobile phone chip market has begun to show a trend of concentration.

The industry believes that after Broadcom, there may be more companies to withdraw from the mobile phone chip market.

Broadcom's footsteps

In October 2012, the chip company Texas Instruments was the first to announce its withdrawal from the highly competitive mobile phone chip market and focus on other markets. At that time, the shipment of smartphones was still growing substantially, but the low gross margin still allowed Texas Instruments to give up.

After a year and a half, the same reason also allowed Broadcom to opt out. After the announcement of the withdrawal of the mobile phone chip market, Broadcom's share price rose more than 10% in the US stock trading day on Tuesday. Obviously, saving $700 million a year in spending still touched Wall Street.

"The investment in mobile phone chips is getting bigger and bigger. Under the pressure of Wall Street's performance, it is normal for Broadcom to make such a decision." Gu Wenjun, chief analyst of iSuppli Semiconductor, said that it is subject to factors such as multi-mode, intellectual property and manufacturing processes. Impact, the mobile phone chip business is also facing more and more challenges, and the withdrawal of Broadcom is not unexpected.

Before the announcement of the withdrawal of the mobile phone chip market, Broadcom actually has great ambitions for this part of the business. In order to meet the arrival of the 4G era, the company spent $164 million to acquire the LTE assets of Renesas Electronics to develop 4G mobile phone chips.

However, with the development of LTE chips, the resulting cost has begun to increase substantially. In the 2013 annual report, Broadcom said that due to increased investment in the 4G mobile phone chip business, the operating profit of the company's mobile and wireless businesses has fallen sharply.

According to the annual report, in 2012, Broadcom's mobile and wireless businesses achieved revenue of 3.809 billion US dollars and operating profit of 561 million US dollars. In 2013, this part of the business achieved revenue of 3.919 billion US dollars, and operating profit plummeted to 365 million US dollars. The substantial increase in costs may eventually lead to Broadcom's determination to exit the mobile phone chip market.

"Wall Street is actually very disgusted with chip companies doing mobile phone baseband chip business." Wang Yanhui, secretary general of the Mobile China Alliance, told Sina Technology that ADI Semiconductor Technologies Inc. sold the baseband chip business under the pressure of Wall Street a few years ago because this part The business will significantly lower the gross profit margin of the company's overall business.

Pick up problem

Just as Texas Instruments exited the mobile phone chip market, Broadcom is now facing the challenge of finding a receiver. According to the current situation, there are not many companies that can take over the Broadcom baseband chip business.

Ascendiant Capital analyst CodyAcree said yesterday that Intel may acquire Broadcom's baseband mobile phone chip business. However, Wang Yanhui, who has been paying attention to the development of the chip industry for many years, seems to have very little possibility. "Intel and Broadcom are not very complementary in the mobile phone baseband chip business," he said.

According to the data, Intel previously acquired Infineon's wireless communication chip business, and formed the "Intel Mobile Communications" division, which is also developing and manufacturing baseband chips. At present, Intel has introduced the Atom series of integrated baseband processors for smartphones and tablets.

The chip of a smart phone is generally divided into two types: a baseband chip and an application chip. The former implements mobile call and data functions, and the latter is mainly responsible for application software operation and multimedia, data, file processing and the like.

According to people who are not willing to be named, Broadcom intends to sell the mobile phone baseband chip business to the domestic Tsinghua Unisplendour Group, but the negotiations seem to have not made a breakthrough. Ziguang Group has successively acquired two mobile phone chip companies, Spreadtrum Communications and Ruidike.

The current two major customers of Broadcom's mobile phone baseband chip business are Samsung and Apple. In Wang Yanhui's view, due to the low gross profit of the baseband chip business, Apple's interest in acquisition will not be great, but Samsung may acquire it.

He further explained that Samsung's application chip business is strong in the mobile phone chip business, but the baseband chip has been using products provided by other companies.

However, more analysts believe that it is not easy for Broadcom to find buyers for the baseband chip business. Because it is difficult for companies to take over such a heavy "burden." The worst plan of Broadcom should be the same as that of Texas Instruments, and it will be cut off directly after nobody cares.

Market concentration

With the withdrawal of Broadcom, the mobile phone chip market is likely to undergo tremendous changes. In the eyes of many insiders, Broadcom is not the last company to withdraw from this market. As competition intensifies, more companies will gradually withdraw. In the end, the entire mobile phone chip market has become concentrated.

Wang Yanhui believes that there will be “three poles” in the mobile phone market in the future, including Apple, Samsung and China Mobile Enterprise Corps. "In the future, if the companies that provide the baseband chip business cannot grasp any of them, it is likely that there will be survival problems."

He said that if this logic is established, companies including Marvell, Intel, etc. may face great challenges, but companies such as Qualcomm, MediaTek, and Spreadtrum, which have established advantages, may have more development prospects.

At present, Qualcomm has established a leading position in the field of high-end mobile phone chips. MediaTek has won a lot of market share in the low-end market. Spreadtrum Communications has also achieved good development due to its deep penetration in the Chinese market.

According to the latest report from market research firm Strategy AnalyTIcs, in the third quarter of 2013, the global baseband chip market grew 10.3% year-on-year to $4.9 billion. Qualcomm, MediaTek, Intel, Spreadtrum and Broadcom ranked the top five in the baseband chip market. Qualcomm continues to be the top spot with a 66% revenue market share, with MediaTek and Intel ranking second and third with 12% and 7% respectively.

Our Price Advantage:We have the best competitive price at the market, also have the same even better quality

Quality advantage:From material to finished product, from design to produce, we control all steps,that's the guarantee of the quality and reliability.Better service at same situation, better cooperation at same service.

Outdoor Billboard Led Display

Outdoor Billboard Led Display,Outdoor Billboard Led Screen,Outdoor Waterproof Billboard Led Display,Waterproof Billboard Led Display

Shenzhen Bako Vision Technology Co., Ltd. , http://www.rentalleddisplays.com