With its profits plummeted more than 90 percent in the latest earnings call, Qualcomm could be fighting a losing legal battle with Apple, giving Broadcom the ideal opportunity to acquire the chipmaker in what could be the largest chip business acquisition ever.
Qualcomm shares jumped more than 12 percent, to $61.55 in late trading following a Bloomberg story, which cited unnamed sources familiar with the deal.
As for Broadcom, its CEO Hock Tan has a huge appetite when it comes to acquisitions and states that he is interested in more deals, which could be halted thanks to the intervention of US regulators since Qualcomm is a USA -based technology company. Nothing has been hammered out yet and there's no guarantee that a deal will materialize. That would give Qualcomm a market value of $103.2 billion.
Avago paid $37 billion in cash and stock for Broadcom.
The saga kicked off almost a year ago, in January 2017, when Apple first filed a lawsuit against Qualcomm for allegedly abusing its market position to extract more money from hardware manufacturers.
Qualcomm and Broadcom declined comment on the reports from Bloomberg and the Wall Street Journal, but Broadcom Chief Executive Hock Tan has a history of aggressively acquiring companies to bolster his company's growth.
Broadcom, based in Irvine, was acquired in 2016 by Avago Technologies, a Singapore based semiconductor outfit that has been growing through acquisitions - including LSI Corp., PLX Technology, Emulex and others.
Broadcom, a major supplier of iPhone parts that counts Apple among its largest customers, said this week it will return its headquarters to the USA from Singapore.
At issue are the licensing fees that Qualcomm charges for patents that cover the basics of how mobile phone systems work.
Qualcomm, based in San Diego, California, is also confronting headwinds in closing its $47 billion purchase of NXP Semiconductors NV.
"If what we think is going to happen happens, which is more endgame consolidation, that would be really good for this business", Waldron said, speaking about his firm's debt operation.
The two companies are already involved in big deals from about a year ago.