Avago Buys Broadcom For $37 Billion

The economy is doing well, and that means companies are spending money. Companies in the chip business are in fact businesses, and spending money to them means acquisitions and mergers. The latest such deal is Avago Technologies buying Broadcom for $37 Billion USD – the largest deal ever made in the semiconductor industry.

The products made by these two companies aren’t usually found in stock at Adafruit, Sparkfun, or in the BOMs on Hackaday.io, but that doesn’t mean these chips aren’t extremely popular in the industry. Avago has a huge catalog of RF goodies and a surprising number of LED products. Broadcom, outside of the SoC found in the Raspberry Pi, likewise isn’t seen very often on workbenches, but their chips are found in everything from set-top boxes to Ethernet and broadband equipment.

Just a few months ago, a merger between NXP and Freescale struck a little bit closer to our hearts, but there is an opportunity for this acquisition to be much more interesting. The company that emerges from the NXP and Freescale merger will be saddled with hundreds of chip lines that all compete with each other – a cornucopia of ARMs, 8051s, Kinetis,  iMX.6, and ColdFires, and that’s just microcontrollers. Avago and Broadcom don’t have a catalog that overlaps nearly as much, and it will be very interesting to see what they can come up with.

41 thoughts on “Avago Buys Broadcom For $37 Billion

  1. Freescale is in the embedded market, so chances are that they won’t touch chips for the short term. They would pretty much tell their customers to switch vendors if they prematurely EOL their products. As to new product for the coldfire or ARM line, that’s a different issues.
    The only success story so far is TI buying a few others e.g. National, Power Trans, etc

  2. There may not be a lot of Broadcom chips on your workbench (unless you have a Particle Photon or Electric Imp) but there is probably one inside your laptop, your phone, your smartwatch, your tablet and so on, plus there’s probably at least one involved in transporting TCP packets for every web page you load.

  3. Broadcom make a lot of WiFi chips. They’re happy to sell their chips, but they’ve been cranky about open-source drivers. Many folks running Linux on laptops still have to take win32 binaries from packages and run them in emulation just to use their built-in WiFi cards. They were schmucky about winmodem chips back when dial-up modems still mattered but towers had moved from ISA to PCI.

    This affects IoT a lot, but we won’t know how much until we get Avago’s stance on opening their specs. If they’re just as schmucktastic as Broadcom, then TI will keep making money and… wait, either outcome is good. Either there will more open-source transceiver chip manufacturers (which would drive prices down) or TI will ramp up production.

    I think I’ll just type “schmucktastic” again. It looks clumsy, but it feels as good to say as a swear word. In fact, it is an adjectival invective — “schmuck” is originally the word for jewel. A jewel’s shape being similar to the head of a male sex organ allowed said organ to inherit the name as a metonym (whole named for a part).

    Now I’m going to pass out after a harsh week that ends in another 24 hours.

    1. Nobody I know in the IoT business uses TI for WiFi, and professionals aren’t bothered about driver/firmware blobs being closed-source (in fact often it’s preferable as they’re verified and there’s less to go wrong.)

          1. This is a common argument, but there is no real supporting evidence that closed software gets bugs/security fixes any faster than open source.

            Regardless, the advantage is that if you want it done fast (or even at all – maybe the software is no longer supported) you can do it without any red tape or NDA’s.

            There are plenty of companies that would happily maintain say windows XP.

          2. No one has said that open source is perfect, but atleast you have a chance of fixing it yourself or by proxy, if the original company does not. Try doing that with binary blobs, it’s 1000x times harder. And if you want “certified” binary blobs, you can get those too even when the source is open, but you can’t get the source wiith only binary blobs.

        1. You’re posting on a maker site that you’re opposed to open source drivers. What other self-deleterious actions do you take on a regular basis?

          We often find bugs in open and closed software. With the closed stuff, we have to create kludgey solutions. When we have the source code, we can trace the stacks and create durable solutions. Obscure bugs don’t stay obscure for long in the modern world — they just become system exploits.

      1. schMuck, not schuck. Focus on your Yiddish or they’ll figure out you’re goy.

        Schmuck-spastic needs a hyphen or it’s difficult to parse. Spastic is only a curse word in the UK — in the US, it only means “prone to spasms”. A spastic schmuck is… well… very happy and about to send its owner for a cigarette.

    1. when i got the email from bc i just searched them on digikey and it appears as if there a mainly optical supplyer … from isolated opamps to LED displays to fiber optics
      clearly there trying to expand in to the communications business

          1. The semiconductor/test arm of of HP was split off to form Agilent. Agilent then sold the semiconductor business to some VC and called it Avago. My division builds networking chips for the networking giants. Another division makes RF parts for cellphones. Other divisions include industrial, fiber, etc. So as far as I know, not much would be sold through Digikey as many of the products we create go straight to builders of systems.

    1. Yeah I see the pi moving to another more powerful arm chip used in more modern devices … But it does not matter if they stop selling the (quite annoyingly closed source) bcm pi will just switch

      1. Yeah. They should try to switch to a lower cost/more powerful chips by Allwinner (or any such mass manufacturer) like the one used in the C.H.I.P. They can be more persuasive due to the volume.

        Heck, the RPi guys can even design an open-source SoC and crowd-source the development costs.

          1. I understand. I work in the semiconductor design industry. They don’t have to design it themselves. There are many ASIC design companies out there who do from RTL to GDS for other customers.

  4. AFAICT Broadcom makes chips for the US military too. If they have some critical design parts in common with chips used in commercial products (phones, routers, PI, etc) I don’t see them publishing specs or opening the drivers source anytime soon.

    1. That’s literally security through obscurity. If I was anyone with a professional interest in messing with the US military’s comms, I’d have the money to hire a team of professionals to reverse-engineer it, without telling anybody. There are people employed to hack satellite TV encryption through burning the chip away with acid and deducing the structure with electron microscopes. And that’s not even Enemy Government scale. If you’re going to have bugs and weaknesses, and that’s something nobody gets to choose, better they’re widely known so users hear about them and can fix them. Keep them a secret and you’re just waiting for a surprise. The only thing you need to keep secret are your secret keys.

      The sort of information Pi fans want from Broadcom would be no use to spies. Just the details of how to drive the graphics hardware, mostly.

  5. Lots of mergers and acquisitions going on. Last year Avago acquired LSI technologies. Then late last year Intel acquired Avago’s networking business – basically the Axxia portion of its LSI acquisition; the later Axxia models are funnily enough ARM based processors. Now Avago has acquired Broadcom. And Intel is in talks of acquiring Altera Corp.

    1. Do Intel still own ARM? They bought the rights to it ages ago, it must make them plenty of money. Much as they love their nameless x86 processors, they’re not quite daft enough to expect people to put them into digital watches and microwave ovens. Phones, maybe. Intel are probably happiest selling ARM for what it’s good for. They have a pricing structure to protect with the x86, it’s never going to go into mid and low-end consumer goods.

  6. When I first heard this I was hoping it would indeed be a non-US company taking over broadcom as they suggested in the news. Non-US because of the spying issues. But unfortunately I soon found out avago is owned by 2 US investment companies, so that’s that then.

    Don’t know what I was thinking with all that optimism.

    1. If it wasn’t the American spies it’d be the Chinese ones. Probably still is both. Not having any sort of legal, business, or moral rights to getting mixed up in it isn’t going to stop them.

      If they can topple legitimate democratically-elected governments in favour of bonkers pet fascists, they’re not gonna worry about sneaking stuff into some microchips.

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