Fabless chip vendor Broadcom Corp. said Tuesday it completed its $164 million acquisition of Renesas Electronics Corp.'s LTE-related assets, a move the firm believes will allow it to penetrate the LTE market early next year.
The acquisition, first announced by Broadcom (Irvine, Calif.) last month, is expected to accelerate availability of Broadcom's multimode, carrier-validated LTE SoC platform. The company plans to sample a quad-core solution in 2014.
The deal also gives Broadcom a multimode, multiband, dual- core LTE Cat 4 SoC that is carrier validated and ready for production, Broadcom said. The company said last month it would begin sampling the dual-core LTE Cat 4 SoC immediately upon the closure of the deal.
As part of the cash deal, Broadcom also gains a team of former Nokia engineers with decades of cellular modem expertise, as well as patents and applications to strengthen its IP portfolio. It also gives Broadcom more leverage in helping to define 3GPP mobile system standards.
"This transaction is complementary of our strategy of driving to the leading edge of modem functionality," said Scott McGregor, president and CEO of Broadcom, during a recent conference call with analysts. "It is expected to meaningfully accelerate our SoC platform, while modestly delaying our thin-modem introduction. We believe having a validated modem sooner enhances our probability of success and enables a faster ramp across more OEMs and more carriers."
Broadcom has been successful in the connectivity space with a combo chip that integrates WiFi, GPS, Bluetooth, and NFC functions in one package. Still, second-quarter 2012 revenue of $967 million in its mobile and wireless business was down 3 percent sequentially due to "relative softness in cellular SoC."
McGregor said that he expects to see LTE revenue from the Renesas deal in early 2014. Broadcom said it will include Renesas' contribution to financial performance in its fourth quarter earnings results.
