Broadcom to Acquire CA Technologies for $18.9B

SAN JOSE, Calif. and NEW YORK – @Broadcom, a leading semiconductor device supplier to the wired, wireless, enterprise storage, and industrial end markets, and @CA Technologies, one of the world's leading providers of information technology (IT) management software and solutions, today announced that the companies have entered into a definitive agreement under which Broadcom has agreed to acquire CA to build one of the world's leading infrastructure technology companies. Under the terms of the agreement, which has been approved by the boards of directors of both companies, CA's shareholders will receive $44.50 per share in cash. This represents a premium of approximately 20% to the closing price of CA common stock on July 11, 2018, the last trading day prior to the transaction announcement, and a premium of approximately 23% to CA's volume-weighted average price ("VWAP") for the last 30 trading days. The all-cash transaction represents an equity value of approximately $18.9 billion, and an enterprise value of approximately $18.4 billion. Hock Tan, President and Chief Executive Officer of Broadcom, said, "This transaction represents an important building block as we create one of the world's leading infrastructure technology companies. With its sizeable installed base of customers, CA is uniquely positioned across the growing and fragmented infrastructure software market, and its mainframe and enterprise software franchises will add to our portfolio of mission critical technology businesses. We intend to continue to strengthen these franchises to meet the growing demand for infrastructure software solutions." "We are excited to have reached this definitive agreement with Broadcom," said Mike Gregoire, CA Technologies Chief Executive Officer. "This combination aligns our expertise in software with Broadcom's leadership in the semiconductor industry. The benefits of this agreement extend to our shareholders who will receive a significant and immediate premium for their shares, as well as our employees who will join an organization that shares our values of innovation, collaboration and engineering excellence. We look forward to completing the transaction and ensuring a smooth transition." The transaction is expected to drive Broadcom's long-term Adjusted EBITDA margins above 55% and be immediately accretive to Broadcom's non-GAAP EPS. On a combined basis, Broadcom expects to have last twelve months non-GAAP revenues of approximately $23.9 billion and last twelve months non-GAAP Adjusted EBITDA of approximately $11.6 billion. As a global leader in mainframe and enterprise software, CA's solutions help organizations of all sizes develop, manage, and secure complex IT environments that increase productivity and enhance competitiveness. CA leverages its learnings and development expertise across its Mainframe and Enterprise Solutions businesses, resulting in cross enterprise, multi-platform support for customers. The majority of CA's largest customers transact with CA across both its Mainframe and Enterprise Solutions portfolios. CA benefits from predictable and recurring revenues with the average duration of bookings exceeding three years. CA operates across 40 countries and currently holds more than 1,500 patents worldwide, with more than 950 patents pending. Financing and Path to Completion Broadcom intends to fund the transaction with cash on hand and $18.0 billion in new, fully-committed debt financing. Broadcom expects to maintain an investment grade rating, given its strong cash flow generation and intention to rapidly de-leverage. The transaction is subject to customary closing conditions, including the approval of CA shareholders and antitrust approvals in the U.S., the EU and Japan. Careal Property Group AG and affiliates, who collectively own approximately 25% of the outstanding shares of CA common stock, have entered into a voting agreement to vote in favor of the transaction. The closing of the transaction is expected to occur in the fourth calendar quarter of 2018.
https://www.lightreading.com/enterprise-cloud/applications/broadcom-to-acquire-ca-technologies-for-$189b/d/d-id/744613?_mc=RSS_LR_EDT

Broadcom Modernizes Fibre Channel with New NVMe Storage and SAN Automation Technology

SAN JOSE, Calif., April 10, 2018 (GLOBE NEWSWIRE) --  @Broadcom Inc. (NASDAQ:AVGO), today announced new NVMe and automation capabilities and the industry’s highest-density Brocade®  Gen 6 switch and port blade, the Brocade G630 switch and @Brocade FC32-64 port blade for the Brocade X6 director. These new Gen 6 Fibre Channel platforms are purpose-built for flash storage to accelerate business operations, respond to dynamic demands, and eliminate complexity. The all-flash data center is here and the next wave of storage innovation is rapidly approaching. Next-generation NVMe storage will dramatically accelerate flash, however it will expose infrastructure limitations. The network will become the new bottleneck and enterprises need to re-evaluate their existing SANs. Brocade Gen 6 Fibre Channel is purpose-built to handle the low-latency and monitoring requirements for NVMe storage. New software optimization reduces latency by nearly 15% for Gen 6 platforms and enhanced integrated network sensors provide new insight into network health and performance of NVMe traffic. The rapid pace of innovation in the data center is increasing the complexity of managing the infrastructure. More time is spent on deployment, configuration, and troubleshooting tasks to maintain service-level agreements and keep up with demands. Brocade automation is powerful for DevOps, simple with Ansible, and open for communities. It leverages open-source technology to automate and orchestrate repetitive tasks, enable IT organizations to significantly improve their efficiency, and decrease the risk of operational mistakes. "Brocade is modernizing Fibre Channel and developing innovative capabilities to enable our customers to take advantage of disruptive storage technology like NVMe and automation,” said Jack Rondoni, senior vice president and general manager, Brocade Storage Networking division at Broadcom. “The all-flash data center is a reality today and NVMe storage is rapidly approaching. Our focus is to innovate and develop industry-leading products and technologies that simplify storage networking and adapt to the evolving IT landscape.”  “As datacenters transition to the latest NVMe-based flash technologies, storage network infrastructure upgrades will be required to maintain scalability growth,” said Eric Burgener, research vice president in Storage at IDC.  “High density Gen 6 Fibre Channel technology like Broadcom’s new family of Brocade blade, switch and director products provide that simple growth path for the large installed base of enterprise-class storage networking.”

https://www.prnewswire.com/news-releases/att-shares-findings-from-field-trials-as-5g-gets-closer-to-reality-300627243.html

ARM Reaches Into the Data Center, Competes With Intel

When talking about #softwaredefined networking ( #SDN) and network functions virtualization ( #NFV), we often talk about software that can run on x86 servers. The term x86 refers to instruction set architectures for silicon chips. Most x86 servers that run SDN and NFV software use chips from either @Intel or @AMD. But that could change as @ARM is making a concerted effort to take market share in this segment. ARM doesn’t make chips. It creates the intellectual property (IP) building blocks for a chip. And while x86 refers to an instruction set architecture, ARM also has a set of defined instructions. But instead of manufacturing chips, ARM gives the instruction set architecture to its customers — such as @Qualcomm, @Broadcom, @NXP, and @Cavium — and those companies manufacture the chips.

https://www.sdxcentral.com/articles/news/arm-reaches-data-center-competes-intel/2018/04/

The Linux Foundation Hosts 'DANOS' Project, a Unified Network Operating System

LOS ANGELES, March 27, 2018 /PRNewswire-USNewswire/ -- #OpenNetworking Summit -- The #LinuxFoundation today announced the Disaggregated Network Operating System ( #DANOS) project to enable community collaboration across network hardware, forwarding and operating system layers. DANOS is initially based on @AT&T's "dNOS" software framework of an open, cost-effective and flexible alternative to traditional networking operating systems. As part of The Linux Foundation, it will incorporate contributions from complementary open source communities to build a standardized distributed Network Operating System (NOS). NOS creation has historically been challenging due to the complexity and magnitude of software and hardware requirements -- as each device in the network needs its own operating system. However, the growth of open source combined with advances in both software and hardware, has fostered an ecosystem of advanced networking applications, new and open technologies, and building blocks on which to host an open and flexible NOS. "We are pleased to welcome DANOS to The Linux Foundation community of open, collaborative innovation," said Arpit Joshipura, General Manager of Networking, The Linux Foundation. "DANOS will provide an open NOS framework that leverages existing open source resources and complementary platforms such as switches and white box routers. We invite others in the broader ecosystem to join the effort to accelerate innovation and creation of an industry-standard disaggregated NOS." "As far as we know, DANOS is an industry first: an open-source, carrier-grade operating system for wide area networks," said John Medamana, Vice President, Packet Optical Network, AT&T. "DANOS is a milestone for us and the industry, and we're excited to see how developers and other users implement and build upon it." Supporting Quotes: "The FRRouting team welcomes DANOS to the Linux Foundation," said J.R. Rivers, CTO of Cumulus Networks. "With 3,413 commits from 68 authors and 42 organizations in the last year, the team continues to build the most full-featured, high-performance open routing stack available." "On behalf of OpenSwitch I'd like to welcome DANOS to open source NOS and Disaggregated Networking," said Alley Hansen, Board Chair, OpenSwitch, and Director, Strategy Networking Dell. "We look forward to the collaboration with DANOS on leveraging the work OPX has accomplished in order to drive more value for operators and to accelerate the adoption of composable networks." "ONF has been a champion of disaggregation, white boxes and open source and in this regard, we are happy to see DANOS launched as a carrier-grade, open source network OS for white boxes," said Guru Parulkar, Executive Director, ONF. "We are looking forward to DANOS and ONF's recent open source platform Stratum, thin switch OS, working together." "SDKLT is a revolutionary, feature-rich open source Software Development Kit, which enables a new approach to switch configuration," said Eli Karpilovski, Director of Marketing, Switch Products at Broadcom. "Broadcom is thrilled to showcase how this mature switch SDK can advance Linux Foundation projects such as DANOS." "We're excited to see the Switch Abstraction Interface (SAI) as the hardware abstraction layer for DANOS, which will enable DANOS to work across the wide set of switches and switch ASICs that implement SAI," said Dave Maltz, Distinguished Engineer, Microsoft Corp.

https://www.prnewswire.com/news-releases/the-linux-foundation-hosts-danos-project-a-unified-network-operating-system-300620140.html

Qualcomm Can't Waste Time on a Pointless Quest

@Qualcomm Can't Waste Time on a Pointless Quest Former CEO @PaulJacobs can't swing a deal and shouldn't even try.  Just say no to tilting at windmills. @Paul Jacobs, a member of Qualcomm Inc.'s founding family and a former CEO, has approached potential partners that might help him buy the chip company valued at more than $90 billion. This effort, first reported by the Financial Times, comes on the heels of the U.S. government quashing a hostile takeover attempt by @Broadcom Ltd. Shares of Qualcomm were trading up Friday on the news.   Even in this go-go time for equity and debt markets, it is a stretch to imagine how Jacobs, whose position on the board may be precarious, could afford to lead a Qualcomm acquisition. And he shouldn't try.

The takeover fight with Broadcom exposed Qualcomm's fundamental business challenges and left the company with few friends among its shareholder base. A long-shot attempt at a management buyout amounts to Jacobs plugging his ears and ignoring Qualcomm's problems, and it will cost his company time and goodwill it can't afford to waste. 

Chipped

Shares of Qualcomm have declined more than 10 percent in three years while an index of semiconductor companies has doubled in price. Percentage price change since 2015
First, the cost factor. Let's assume Jacobs would have to top Broadcom's first offer of $82 a share, which directors including Jacobs laughed off as too low. Even at that price a buyout would cost $120 billion before accounting for Qualcomm's debt. It was a stretch for Broadcom to afford a deal of that size, and it seems impossible for an individual, even with help from a private equity firm.

The obvious comparison is Michael Dell's 2013 buyout of his company, Dell Inc. But Michael Dell already owned about 14 percent of the company, valued at $3 billion or so at the time, which he rolled into the buyout. And the Dell acquisition was about one-fifth of the possible cost of a Qualcomm takeover. Jacobs and his family own 1.4 million shares and soon-to-vest options in Qualcomm, a 0.1 percent stake valued at less than $100 million. Michael Dell was rich enough to lead his buyout. The Jacobs family is not, unless it has a secret reserve of wealth. 

It's also not clear Jacobs will find the financing help he needs. Foreign financiers seem off the table. The U.S. government spiked a Broadcom deal in part over concerns that a private equity-like approach would hurt the country's technology position. Dell teamed up with private equity firm Silver Lake. But that firm was among the backers of Broadcom's bid. And its participation was based on confidence in Broadcom CEO Hock Tan's ability to improve Qualcomm's profitability and run the company better than existing management. 

Private equity firms don’t make a habit of backing companies that want to escape the public markets so they can continue spending as much as they want on research and development and cling to a business model that has invited repeated fights with regulators and customers. Should Jacobs and Qualcomm CEO Steve Mollenkopf sign a deal with a buyout financier, they would also likely be signing their own exit  agreements. Jacobs' pursuit of a possible deal has already left him in hot water with fellow directors. 

https://www.bloomberg.com/gadfly/articles/2018-03-16/mlp-stocks-fall-not-thanking-ferc-it-s-friday

How China's Huawei Killed $117 Billion Broadcom Deal

#CFIUS is concerned that @Broadcom would cut back on R&D funding at @Qualcomm, strengthening Huawei at a time when rivals from @Ericsson to @Nokia are grappling with weak telecoms spending. That theoretically gives Chinese companies such as @Huawei and closest rival @ZTE Corp. the upper hand in steering the direction of wireless communications development, thereby -- so the argument goes -- jeopardizing U.S. national security. CFIUS’s concerns over the deal are said also to stem from Broadcom’s ties to Huawei, which was blacklisted in 2012 along with ZTE when the U.S. House Intelligence Committee cited security risks posed by the companies.

https://www.bloomberg.com/news/articles/2018-03-13/how-china-s-huawei-killed-117-billion-broadcom-deal-quicktake

Trump Blocks Broadcom’s Bid for Qualcomm

WASHINGTON — President @Trump on Monday blocked @Broadcom’s $117 billion bid for the chip maker @Qualcomm, citing national security concerns and sending a clear signal that he was willing to take extraordinary measures to promote his administration’s increasingly protectionist stance. In a presidential order, Mr. Trump said “credible evidence” had led him to believe that if Singapore-based Broadcom were to acquire control of Qualcomm, it “might take action that threatens to impair the national security of the United States.”

https://mobile.nytimes.com/2018/03/12/technology/trump-broadcom-qualcomm-merger.html?referer=https://www.google.com/

NXP shareholders owe a big 'thank you' to Broadcom's CEO

@Broadcom CEO @HockTan says that buying @NXP doesn't solve @Qualcomm 's problems — but he's currently a hero to NXP shareholders. Broadcom's months-long unsolicited pursuit of Qualcomm likely compelled the San Diego-based chipmaker to bid higher than it otherwise would have to acquire NXP, according to people familiar with the matter. Qualcomm upped its bid 16 percent to $127.50 per share, or about $44 billion, the company said in a statement Tuesday. The final hurdle may have been proxy advisory firm Institutional Shareholder Services' report on Friday advocating that Qualcomm close NXP to provide the company "with the next-best safety net of diversification," failing a deal with Broadcom. Within an hour of the report being published, Qualcomm called some NXP shareholders asking what price it would take to secure a successful tender offer, according to the people, who asked not to be named because the discussions were private.

https://www.google.com/amp/s/www.cnbc.com/amp/2018/02/20/nxp-shareholders-owe-a-big-thank-you-to-broadcoms-ceo.html#ampshare=https://www.cnbc.com/2018/02/20/nxp-shareholders-owe-a-big-thank-you-to-broadcoms-ceo.html

Qualcomm, Broadcom plan to meet on February 14: sources

( @Reuters) - @Qualcomm Inc and @Broadcom Ltd plan to meet on Wednesday to talk about the latter's $121 billion acquisition offer, the first time the semiconductor companies will discuss the potential deal, people familiar with the matter said. The meeting comes after Broadcom raised its cash-and-stock offer last week from $70 to $82 per share, and made other concessions, including offering to pay Qualcomm an $8 billion breakup fee should antitrust regulators block the deal. Qualcomm said last Thursday that Broadcom's new offer still undervalues it and falls well short of the firm commitments on regulatory issues it expected. However, it offered to meet Broadcom to see if it can address what it called "serious deficiencies in value and certainty in its proposal."

https://www.google.com/amp/mobile.reuters.com/article/amp/idUSKBN1FW03G#ampshare=https://www.reuters.com/article/us-qualcomm-m-a-broadcom/qualcomm-broadcom-plan-to-meet-on-february-14-sources-idUSKBN1FW03G

Broadcom raises offer to buy Qualcomm to $121 billion

(@Reuters) - Chipmaker @Broadcom Ltd on Monday raised its offer to buy @Qualcomm Inc by 24 percent to more than $121 billion, sweetening the bid and putting more pressure on its rival to come to the table for negotiations. The new offer values the company at $82 per share - a premium of 24 percent over Qualcomm's close on Friday. Qualcomm in November rejected Broadcom's $70 per share cash-and-stock bid that valued the company at $103 billion.

https://www.google.com/amp/mobile.reuters.com/article/amp/idUSKBN1FP1KX#ampshare=https://www.reuters.com/article/us-qualcomm-m-a-broadcom/broadcom-raises-offer-to-buy-qualcomm-to-121-billion-idUSKBN1FP1KX

Broadcom Expands Ethernet Switch Software Suite with Industry’s First Fully Open Source Software Development Kit

Open APIs and source code of the Ethernet Switch Software Development Kit accelerate development and deployment of networking stacks SAN JOSE, Calif., Jan. 30, 2018 (GLOBE NEWSWIRE) -- @Broadcom Limited (NASDAQ:AVGO), today announced the immediate availability of #SDKLT, the industry's first fully open source Software Development Kit (SDK) for Ethernet switch ASICs. SDKLT offers a revolutionary table-driven approach to configure Ethernet switch ASICs, and is built to accelerate the software development of high-performance networking infrastructure. The release of SDKLT further establishes Broadcom's position as the market leader in not only providing Ethernet switch silicon, but also in delivering an open, scalable, and high-performance switch SDK. By offering a complete open source SDK, Broadcom takes a significant step forward towards fulfilling the vision of an entirely open networking ecosystem. Now, hardware vendors, network OS providers, and SDN controller developers can readily build and customize their switch APIs. They can also freely redistribute their enhancements and leverage the community to quickly deliver high-quality solutions to the market. The innovative logical table-based approach used in SDKLT greatly simplifies the task of configuring the feature-rich Ethernet switch silicon in use today. With this approach, all device physical resources such as MAC Address Tables, L3 route tables, etc. are presented to users as explicitly defined logical tables instead of specific function calls. The new switch software approach empowers data center operators with greater control over their infrastructure resources. SDKLT introduces new ways to monitor, analyze, and provision switch resources, all through the use of industry standard automation tools. Network OS and SDN applications will benefit from this new level of operational efficiencies which are realized through the flexible transaction management, device resource visibility, and performance improvements offered by SDKLT. "We are delighted to announce another industry first with our fully open source SDKLT to accelerate the development and deployment of Broadcom's switch silicon," said Ram Velaga, senior vice president and general manager of switching products. "SDKLT brings a fresh, state-of-the-art software development approach to the broader community of network software developers where they can now fully and directly control and monitor the rich switch feature set optimized for SDN and cloud use cases." The first open source offering of SDKLT is based on the BCM56960 Tomahawk® switch, the industry's most popular data center ToR and fabric device, and is supported by a wide and robust group of ecosystem partners. SDKLT open source code is now available on GitHub and the logical table APIs are Apache 2.0 licensed. This enables users to build, customize, and share innovation across a wide range of switch platforms and developers. Key Attributes and Benefits of the New SDKLT Software: - Open source code and the logical table APIs are released under Apache 2.0 license - Device behavior is managed by logical tables via small set of APIs - Logical table APIs designed to readily support RPC-able client-server model - Full device provisioning and control through automation (CLI, Yaml, XML, etc.) - Performance optimized software architecture - High visibility and control over device resources provides optimal resource management - Flexible transaction management with comprehensive support for batched or atomic operations via single API call - Architected for High Availability (HA) including support for Soft Error Recovery, Warmboot, and In Service Upgrade Industry Support Cloud Network Operators and Original Equipment Manufacturers (OEMs) Dr.Han Li, Director of CMCC Network Institute, China mobile "CMCC applauds Broadcom's decision to open source SDKLT on its flagship Tomahawk product. It is a great step forward in accelerating innovation in the SDN and datacenter use cases. We look forward to continuing our close collaboration with Broadcom in leading edge network technologies." Gavin Cato, Senior Vice President Development Engineering, Dell Networking "As pioneers and firm believers in Open Networking, we developed our Dell EMC OS10 operating system to deliver the unique flexibility necessary for a modern cloud provider. With these new SDKLT capabilities, our OS10 customers can further optimize data center infrastructure for greater efficiency and scale." Yuval Bachar, Principal Engineer, Linkedin "Open source networking has made significant progress over the last few years, but the vendor SDK has been one of the last closed source components. It is great to see Broadcom break that barrier by providing an open source SDK. I think this is a game changing step in moving the open networking ecosystem to the next level." Wen Quan, Switch product division data center product development manager, Ruijie "Ruijie has leveraged Broadcom's industry leading switch silicon to build world class switching and routing solutions. It is great to see Broadcom open source its innovative, high performance SDKLT on the Tomahawk device. We are convinced this step will accelerate innovation in networking and deliver more robust solutions all around." Ecosystem Partners: Prashant Gandhi, VP and Chief Product Officer, Big Switch Networks "SDKLT Logical Table APIs enable Big Switch to accelerate innovations in our automation-centric and zero-touch SDN fabric solutions, which are deployed on open networking hardware platforms that leverage Broadcom switch ASICs. SDKLT being available as an open-source software is also highly synergistic with Big Switch-contributed Open Networking Linux, which together will dramatically speed up adoption of open networking solutions." JR Rivers, Co-Founder and Chief Technology Officer, Cumulus Networks: "As a pioneer in the development of open software for networking, Cumulus is thrilled that Broadcom is opening up its SDK. We look forward to integrating this SDK in our Cumulus Linux offerings and work closely with Broadcom to push the entire disaggregated networking ecosystem forward." Guru Parulkar, executive director of the ONF and Stanford Platform Lab "ONF's goal is to deliver high quality open source SDN solutions for operator networks. Broadcom has been a key contributor to ONF over the years, with contributions to multiple SDN use cases such as CORD and software-defined packet transport network (SPTN). A high performance, open source switch SDK is critical for optimized production ready networks, and we look forward to leveraging SDKLT software in current and other emerging SDN projects." Atsushi Ogata, President and CEO, IP Infusion "Broadcom's SDKLT offers a novel approach to device programming. As a strategic partner of Broadcom, IP Infusion is embracing this new approach as it gives the freedom to choose your own software implementation of Broadcom devices. The Logical Table APIs offered by SDKLT brings a new dimension on how we develop device-specific implementation of control plane protocols. The multi-threading and batching capabilities of SDKLT will help networks achieve higher performance and scalability, which are important for our OcNOS network operating system in the service provider market." Hannes Gerdler, CTO, rtbrick "From day one RtBrick has followed a declarative design pattern for our Web-scale SwitchOS 'RtBrick FullStack' (RBFS) where our developers declare the control-plane flow consisting of object, tables and table subscriptions. We are pleased to see that Broadcom is now offering a declarative style SDK for driving their Silicon. We anticipate that by using SDKLT's new style and flexibility it offers, it will help us bring out innovative products out quickly."

http://www.nasdaq.com/press-release/broadcom-expands-ethernet-switch-software-suite-with-industrys-first-fully-open-source-software-20180130-00667

Dell Explores Strategic Alternatives, Including IPO, Deal With VMware

@DellTechnologues #DVMT -6.45% Inc. is considering a range of strategic alternatives that could transform the maker of PCs and data-storage devices, according to people familiar with the matter. In the review, which is in a preliminary stage, the closely held technology giant is expected to explore options including an initial public offering and a purchase of the rest of @VMware Inc., a publicly traded cloud infrastructure company, the people said. VMware has a market value north of $50 billion. Talks between the companies are at an early stage, one of the people said.  It wasn’t clear what other options might be on the table. If Dell pursued a public listing, it would be one of the biggest IPOs in recent years and could provide a shot in the arm for the sluggish new-issue market. An IPO also could provide the company with cash to invest in the business and pay down debt. That or a full takeover of VMware would be the latest in a series of big deals that have transformed Dell in the last five years—and loaded it with debt. The company went private in a roughly $25 billion leveraged buyout in 2013 by its founder, Michael Dell, and investment firm Silver Lake. In 2016, Dell bought data-storage company EMC for $67 billion in the largest technology takeover ever. When the deal closed in late 2016, Dell employed about 140,000 people globally and had $74 billion in revenue. It said it would maintain operations in Hopkinton, Mass., where EMC, a pioneer in data storage, was located. It is now the world’s largest privately controlled tech company. Mr. Dell indicated at the time that the company still had an appetite for acquisitions. But the deal making has added a significant amount of debt to Dell’s balance sheet. The company currently has about $51 billion of debt, according to S&P Capital IQ. Dell, which pays roughly $2 billion in annual interest on its debt, is among the heavily indebted companies that is expected to be hurt by the tax bill Congress passed at the end of last year. The new tax law caps companies’ ability to deduct interest expense from their taxes at 30% of earnings before interest, taxes, depreciation and amortization.  Once the largest personal-computer maker, Dell is now known as much for its corporate products such as storage, servers and security software following the EMC deal. It is also joining the crowded field of companies wagering big money on the so-called Internet of Things, as the computing giant looks for new avenues of growth amid a shift in corporate spending to the cloud. The Round Rock, Texas, company recently said it would commit $1 billion over three years to research and development to create hardware and software that would help manage billions of everyday devices connected to the web. @SilverLake, which maintains a big stake in @DellTechnologies , has a history of backing the deal making of its portfolio companies. In addition to Dell, it has done so at @Broadcom Ltd. , which is pursuing a $105 billion hostile takeover of @Qualcomm Inc., and @Symantec Corp. , which has bought a string of #cybersecurity companies. @VMware, based in Palo Alto, Calif. produces software related to databases, storage and the Internet of Things. When Dell bought EMC in 2016, EMC owned 80% of VMware.

https://www.wsj.com/articles/dell-explores-strategic-alternatives-including-ipo-deal-with-vmware-1516935429

Qualcomm signs $2 billion sales MOUs with Lenovo, Xiaomi, vivo and OPPO

(Reuters) - @Qualcomm Technologies Inc (QCOM.O) has signed memorandums of understanding for sales worth at least $2 billion with top Chinese smartphone vendors, receiving vocal support from the firms as it fights an unsolicited buyout bid from @Broadcom Ltd (AVGO.O). @LenovoGroup (0992.HK), @Guangdong @OPPO Mobile Telecommunications Corp, @vivo Communication Technology and @Xiaomi Communications have expressed an interest in buying Qualcomm components with a total value of no less than $2 billion over three years, the U.S. chip maker said on Thursday.  The non-binding agreement will be subject to further agreements and covers technology related to RF Front-End components, Qualcomm said in a statement. The companies announced the multi-year agreement at a Qualcomm-hosted event in Beijing attended by the U.S. firm’s chairman and chief executive. At the event representatives from the Chinese companies expressed concerns that a possible acquisition of Qualcomm by Broadcom could hurt investment in chip technology. Broadcom in November made an unsolicited $103 billion bid for Qualcomm, which Qualcomm says undervalues it. A potential merger would likely face regulatory scrutiny in China, where Qualcomm has been fined before over anti-trust issues and where the government is promoting local chip production.

https://www.reuters.com/article/us-china-qualcomm/qualcomm-signs-2-billion-sales-mous-with-lenovo-xiaomi-vivo-and-oppo-idUSKBN1FE0D6

Semiconductor Stocks: Year In Review; Where to Place Your Chips in 2018

With high-flying chip names such as @Micron (MU) and @Nvidia (NVDA) leading the way, #semiconductor stocks were one of 2017’s best-performing groups. Despite ending the year on a rough note, where the Philadelphia Semiconductor Index (SOX) declined almost 7% in late November, the SOX still crushed the broader market, posting 2017 returns of almost 40%, besting the 25% rise in the Dow Jones Industrial Average and a better-than 19% return in the S&P 500 Index. But as Lay’s has told us, when it comes to chips, you can’t eat just one. In that vein, unlike previous years, it was just the sexy growth chip names that dominated 2017. Even traditional powers like Intel (INTC), which rose 30%, ranking as one of the better-performing Dow components, participated in the rally. Thanks to its $15.3 billion acquisition of Israeli self-driving technology company Mobileye, Intel wrote its own narrative as a force to be reckoned with in the autonomous car market, which has become the new battleground for high-tech companies looking new revenue streams. Where Intel thrived Advanced Micro Devices (AMD), which was an early chip favorite in 2017, ended the year on a sour note. This is even though the company’s earnings during 2017 were consistently above expectations. In Q3 the company crushed estimates on both the top and bottom lines. Yet, the stock took a pounding, falling — at one point — more than 15%. Investors were fearful about the company’s lower Q4 guidance, which overlooked that the fourth quarter, with its implied sequential revenue decline, was seasonally weak and has little to do with business fundamentals. Nevertheless, in this fickle market where tons of other growth options exist, investors opted to go elsewhere. And it would seem Micron (up 85% in 2017) — a stock I told you to buy on March 23 at around $26 per share — and Nvidia (up almost 80%) were the beneficiaries. The former, which I proudly own, is operating on its stated objectives and better-diversifying the business, which — in my opinion — effectively removes the threat of what has been a highly cyclical industry for DRAM and NAND memory chip pricing. For Nvidia, few expected it would follow a colossal 2016 performance, during which it posted returns of 235%, with 2017 returns of almost 80%. But thanks to successes in high-growth markets like artificial intelligence, autonomous vehicles, where its chips are at the center of autonomous driving technology, the company posted breathtaking top- and bottom line growth results throughout 2017, which has now crushed Wall Street's estimates the past two years. Elsewhere Broadcom (AVGO) — though it didn’t get nearly the attention as Micron and Nvidia — was a clear winner. With better than 45% returns, the wireless giant, which has chip placement in both Apple (AAPL) and Samsung (SSNLF) products, gives it an advantage over competitors. And its $130 billion offer for Qualcomm (QCOM), which if completed, would be the biggest-ever tie-up in the tech sector, suggest Broadcom has no plans to rest in search of value-creating opportunities. Which companies will be this year’s Micron, Nvidia or Broadcom? Though it’s early, I expect AMD to have a bounce-back year. Other names to keep an eye on include Analog Devices (ADI), Cavium (CAVM), Texas Instruments (TXN), and Xilinx (XLNX). Granted, as evidenced by their strong performances in 2017, lead by Texas Instrument’s 44% gain, these four are not in the discount bins. But not only are they solid in terms of execution (not one missed analysts top or bottom-line estimates in 2017), they each have extensive product portfolios, containing assets that serve multiple applications within primary end markets such as enterprise storage, industrials, wired and wireless businesses, which are all growing at double-digit rates.

http://m.nasdaq.com/article/semiconductor-stocks-year-in-review-where-to-place-your-chips-in-2018-cm900733

2 Businesses That Broadcom Will Kill if It Buys Qualcomm

#AVGO) offered to acquire fellow chip giant @Qualcomm (NASDAQ: #QCOM) for a total consideration of $70 per share, with $60 in cash and the remaining $10 in stock. Qualcomm, of course, rejected the bid, claiming that @Broadcom's offer -- which came at a solid premium to where Qualcomm's shares were trading before Broadcom's offer came along -- "undervalues Qualcomm and comes with significant regulatory uncertainty." Qualcomm. Time will tell if Broadcom is successful in its quest to add Qualcomm to its portfolio, but I'd like to explore a different angle to the story: Which Qualcomm businesses Broadcom will likely kill if it succeeds in buying Qualcomm. Some quick background Broadcom CEO Hock Tan essentially manages the company's business portfolio as a good investor would be expected to manage a stock portfolio: He keeps winners and gets rid of losers. There's an additional subtlety to Tan's style, though: He's not interested in businesses that don't make money or aren't established leaders in their fields. I've heard it said that Tan doesn't like to invest in research and development, but that's not quite right. Instead, it's more apt to say that Tan doesn't like to speculate with Broadcom's research and development dollars. If Broadcom has a franchise that's either the top player in its field or a close second, then the company will likely invest to either maintain its leadership position or to try to capture such a position. But if it's not already an established leader in that market and is likely to lose significant money trying to break into that market, Broadcom isn't going to stick around. With that in mind, here are two such Qualcomm businesses/efforts that I expect Broadcom to wind down or sell if its acquisition attempt is successful. Centriq server chip business Not too long ago, Qualcomm announced its Centriq 2400 series of processors aimed at the data center. Qualcomm is coming into this market in the hopes of challenging established data center processor vendor Intel (NASDAQ: INTC). Though Qualcomm's new chips have demonstrated some impressive capabilities, even relative to Intel's best, in some respects, the reality is this: Capturing share from Intel would likely be a very long and arduous process that would also require substantial investments in research and development. There's little guarantee that those investments will pay off in terms of meaningful revenue and profit, especially since Intel is almost certainly going to fight hard to maintain its position in this market. Intel can afford to ratchet up its investments in its own server chips because it'd be doing so to try to protect what is quickly becoming its core business. Qualcomm could do so, but the efforts could be costly and a drag on overall corporate profitability for years to come. This is exactly the sort of business that Broadcom's management would find to be incompatible with its business aims, and in the event of a successful acquisition of Qualcomm, the Centriq server business would almost certainly be shuttered or sold. Snapdragon PCs Another area where Qualcomm is currently getting a lot of attention is its Snapdragon-based PC efforts. Qualcomm is, as it is in the data center, trying to challenge PC processor incumbent Intel by bringing its mobile processors to thin and light PCs. While Qualcomm has demonstrated some interesting advantages over Intel's platforms (in particular, Qualcomm claims much superior battery life to Intel-based processors), the reality is that Qualcomm is probably investing a lot of money into this effort for what is unlikely to be a big payoff. Image source: Qualcomm. Only a small subsegment of the total PC processor market is really addressable by Qualcomm, and even within that small sub-segment Intel will obviously aggressively compete. On top of that, the overall PC market is a declining one. So, Qualcomm is essentially investing a significant amount of money to go after a market that's dominated by a strong incumbent and, to top that off, is only going after a small slice of that market. This business is probably even less attractive to a company like Broadcom than the Centriq server processor business is, and I would expect it to be swiftly wound down. Broadcom can refocus Qualcomm I think Broadcom management will ultimately be able to wring a lot of value out of Qualcomm. Qualcomm has the world's best cellular modem technology, and the world's best merchant mobile applications processor platforms. To that end, I would expect that under Broadcom, Qualcomm would ultimately accelerate market share gains in the smartphone applications processor market, recapture significant cellular modem share in the iPhone, and simply generate a lot better profitability. As much as those who seem to admire Qualcomm will probably hate to admit, I think Broadcom's management can deliver tremendous value with Qualcomm's assets -- far more than Qualcomm's current management team was able to, as the company's share price prior to the Broadcom acquisition rumors clearly showed.

https://www.google.com/amp/s/www.yahoo.com/amphtml/finance/news/2-businesses-broadcom-kill-buys-220700831.html#ampshare=https://finance.yahoo.com/news/2-businesses-broadcom-kill-buys-220700831.html

Google reportedly concerned that Broadcom’s takeover of Qualcomm could harm innovation

It might not be the most eye-catching news report, but @Broadcom ‘s attempts to buy @Qualcomm could have a significant impact on the technology industry, an impact that the likes of @Google, along with @Microsoft, are concerned about. Google reportedly feels that such a takeover would stagnate innovation, since Broadcom is reportedly known to emphasize cost-cutting over developing new technologies. Remember that the vast majority of Android smartphone manufacturers use Qualcomm chipsets, while Microsoft has recently been pushing to also equip PCs with Qualcomm chipsets, so any pause on development of new technologies would directly and indirectly impact both of their businesses. Another concern is the relationship Qualcomm and Apple would have if Broadcom were to succeed with the buyout. Currently, we wouldn’t say that Qualcomm and Apple are on friendly terms with each other, giving the ongoing court proceedings between the two companies. Most recently, Apple accused the chipmaker of infringing on eight of its patents related to battery efficiency.

https://www.google.com/amp/s/www.androidauthority.com/google-broadcom-qualcomm-innovation-821751/amp/#ampshare=https://www.androidauthority.com/google-broadcom-qualcomm-innovation-821751/

Is a Beat in the Cards for Broadcom (AVGO) in Q4 Earnings?

#Broadcom Limited AVGO is set to release fourth-quarter fiscal 2017 results on Dec 4. The company is benefiting from strong demand for Wi-Fi chips and radio frequency solutions from smartphone original equipment manufacturers (OEMs). Moreover, rapid adoption of connectivity-related products in #InternetofThings ( #IoT s) appliances and automobiles is a growth driver in the soon-to-be-reported quarter. @Broadcom 's extensive product portfolio serves multiple applications within four primary end markets - wired infrastructure, wireless communications, enterprise storage and industrial & others. The company's focus on multiple target markets and geographies mitigates operating risks and lessens exposure to volatility in any single market. Notably, the company beat the Zacks Consensus Estimate in all of the trailing four quarters, with an average positive surprise of 4.79%. Last quarter, the company delivered a positive earnings surprise of 1.74%.

http://m.nasdaq.com/article/is-a-beat-in-the-cards-for-broadcom-avgo-in-q4-earnings-cm886156

Broadcom Completes Acquisition of Brocade Communications Systems

SAN JOSE, Calif., Nov. 17, 2017 /PRNewswire/ -- #BroadcomLimited (NASDAQ: AVGO) (" @Broadcom "), a leading semiconductor device supplier to the wired, wireless, enterprise storage, and industrial end markets, today announced that it has completed its acquisition of #Brocade Communications Systems, Inc. (NASDAQ: BRCD). @Brocade 's common stock will now cease to be traded on NASDAQ. Brocade will operate as an indirect subsidiary of Broadcom and will be led by Jack Rondoni as General Manager. Previously, Rondoni served as Senior Vice President of Storage Networking at Brocade, having joined the company in 2006. Rondoni brings over 20 years of experience in storage, networking and technology. "We are pleased to complete this transaction, which strengthens Broadcom's position as a leading provider of enterprise storage and networking solutions and enables us to better serve our OEM customers," said Hock Tan, President and Chief Executive Officer of Broadcom. "Broadcom has a track record of successfully integrating and growing companies we acquire, enabling us to offer customers a leading portfolio of best-in-class franchises across a diverse set of technologies. We intend to invest in and grow the Brocade business to further enhance its capabilities in mission-critical storage networking." Tan continued, "We are pleased to announce Jack's appointment as General Manager, and would like to welcome the outstanding team of employees at Brocade to the Broadcom family. Together, we will continue to exceed the expectations of our customers." "We are very excited to join the Broadcom team and provide compelling benefits for customers and new opportunities for Brocade's employees," said Jack Rondoni, General Manager, Brocade business unit. "Broadcom provides us with the scale, resources and complementary capabilities to accelerate growth, execute on our strategic initiatives and extend our market leadership in storage area networking. We share a common culture of innovation and execution, and we look forward to the exciting new growth opportunities we will have as part of the Broadcom team."
http://markets.businessinsider.com/news/stocks/Broadcom-Completes-Acquisition-of-Brocade-Communications-Systems-512369

Broadcom Makes Unsolicited $105 Billion Bid for Qualcomm

@Broadcom is making an unsolicited bid to buy mobile chip maker @Qualcomm for $130 billion, which would create a chip-making behemoth with the capabilities to challenge industry leaders Intel and @Samsung and continue the multiyear consolidation trend in the semiconductor space. The deal would combine Broadcom’s broad chip-making business, which supplies silicon for everything from network switches and enterprise storage appliances to set-top boxes, with Qualcomm’s leading mobile chip capabilities. Should Qualcomm’s already proposed $47 billion offer for chip maker NXP finally get past regulatory reviews in places like Europe and China, it also would bring autonomous cars and microcontrollers (MCUs) into Broadcom’s fold. Broadcom officials said Nov. 6 that they are willing to make the deal for Qualcomm regardless of whether or not the NXP deal goes through. Building Secure Multi-Factor Authentication Download Although reports about Broadcom’s interest in Qualcomm have surfaced over the past couple of days, in a Nov. 6 letter to Qualcomm’s board of directors, Broadcom President and CEO Hock Tan said he first approached Qualcomm CEO Steve Mollenkopf about the idea more than a year ago
http://www.eweek.com/pc-hardware/broadcom-makes-unsolicited-105-billion-bid-for-qualcomm

Better Buy: Marvell Technology vs. Broadcom

Semiconductor stocks have been a blessed lot so far this year. The PHLX Semiconductor Sector Index has shot up impressively in 2017 thanks to several tech trends, including connected cars, the Internet of Things ( #IoT), mobile devices, and enterprise storage, that have boosted chip demand. @MarvellTechnology Group (NASDAQ:MRVL) and @Broadcom (NASDAQ:AVGO) are making good use of the expanding semiconductor market opportunity by tapping one or more of these trends. Not surprisingly, both these stocks have done extremely well over the past year, up more than 40%.  MRVL DATA BY YCHARTS Marvell is carrying strong momentum right now, as its latest results show. Broadcom, on the other hand, looks primed for content gains as it works to increase market share across its existing businesses. But which semiconductor stock is the better buy today? To find an answer, let's take a closer look at the catalysts and valuations of both companies.  IMAGE SOURCE: GETTY IMAGES. The case for Marvell Technology Marvell Technology has found terrific traction in the storage market, which supplies more than half of its total revenue. The company is tapping the secular growth trend in this market by building controllers that go into hard-disk drives (HDDs) and solid-state drives (SSDs). For instance, the global RAID (redundant array of inexpensive disks) controller market is expected to grow at a steady 6% until 2020, according to market researcher Technavio, driven by an increase in enterprise storage. RAID controllers are used to manage storage devices in a computer or an array of drives. Marvell is aware of this booming end market, so it has developed a suite of controllers to manage storage connectivity in the cloud. More importantly, the company has been able to ship its storage controllers in large volumes, thanks to growing enterprise SSD demand. In the past year and a half, the company has shipped over 50 million SSD controllers, with these chips now accounting for almost 25% of its total storage business. Furthermore, the SSD business isn't going to run out of momentum anytime soon, as demand for enterprise SSDs is estiamted to increase at a CAGR (compounded annual growth rate) of 17% over the next four years. Although Marvell's biggest business by revenue will get bigger in the future, the company is trying to find other areas to boost its business, such as automotive. Marvell is making a specific play in the automotive space by targeting the Ethernet switch market, which could become a $1 billion business by 2023. In fact, industry forecasts suggest that automotive Ethernet demand could rise by 42% a year for the next four years. Not surprisingly, Marvell has stepped on the gas by developing specific products for this space, such as a secure automotive Ethernet switch to safely transfer data between connected vehicles. Marvell Technology's continued progress in the storage and automotive spaces strengthens the company's long-term investment case. The case for Broadcom Just like Marvell, Broadcom is finding terrific traction in the storage business. Its enterprise storage revenue shot up 39% year over year last quarter, on the back of increased demand for controllers. Therefore, Broadcom and Marvell could go head-to-head in this arena, though the former now seems to have the upper hand, given the pace at which it is currently growing. However, Broadcom's wireless business is going to account for the majority of its growth, given its strong positioning at Apple. Broadcom is believed to have landed more dollar content (leading to more revenue per device) in the new-generation iPhone(s). As my Foolish colleague Ashraf Eassa pointed out, Broadcom's dollar content in the new iPhones could jump 40%, compared to the previous generation and the number of iPhones sold is also expected to increase. Furthermore, Broadcom is intent on replicating its success in the wireless space across its entire business line. The company plans on increasing the amount of semiconductor content it supplies into its mature end markets, such as network infrastructure, by way of technological innovations.  The verdict Broadcom and Marvell both have their own catalysts, though the companies will compete for share in the storage business. Marvell, however, enjoys an advantage because it is targeting fast-growing markets such as connected cars, while Broadcom has already exited the IoT space. Broadcom's growth will depend a lot on content gains in its mature business segments such as wired infrastructure, which supplies half of its revenue. Moreover, Marvell is the cheaper bet from a valuation perspective, as is clearly evident in the following table: Company P/E Ratio Forward P/E Ratio P/S Ratio Marvell 33.8 14 3.63 Broadcom 188.5 14 6.29 DATA SOURCE: YAHOO! FINANCE. P/E = PRICE TO EARNINGS. P/S = PRICE TO SALES. Investors will have to pay much less to buy into Marvell's growth, which makes it a value play as compared to Broadcom. Those looking for iPhone-related gains could consider Broadcom, despite its expensive valuation. But currently, from a long-term perspective, Marvell looks like the more logical bet.

https://www.fool.com/investing/2017/10/05/better-buy-marvell-technology-vs-broadcom.aspx