President Donald Trump appeared with Broadcom Corp. CEO Hock Tan last week, saying the company will relocate to the United States.

There has already been broad consolidation in the computer chip sector and a tie-up between the two giant companies would create a massive producer.

The Broadcom $130 billion offer of $70 per share to Qualcomm stockholders would be $60 per share in cash and $10 per share of Broadcom. Broadcom says its proposal is a 28 percent premium over the closing price of Qualcomm common stock on November 2, the last “unaffected” trading day for the companies.

It has also offered to pick up $25 billion in debt.

The deal would have impact on the Triangle, where Qualcomm operates a research office.

The Qualcomm Design Center in Raleigh

The center in Raleigh “has a mission to create the next generation of processor technologies for the wireless industry. Our team behind Qualcomm® SnapdragonTM processor is expanding their influence and growing their engineering team to create new SoC ASICs. The Snapdragon platform leads the industry in mobile computing performance and power efficiency, and this SoC will be no different.

“We have open positions for engineers at all experience levels in the key areas of: Design, Verification, Embedded Software, Performance Modeling, Enablement and more. We’re looking for talented and creative people to join our world-class team to design and develop the next generation SoC and CPUs. Sound exciting? View our openings and apply today.”

[Numerous jobs are available. See details at https://www.qualcomm.com/company/careers/locations/raleigh ]

Source: Qualcomm

“We would not make this offer if we were not confident that our common global customers would embrace the proposed combination,” Tan said in a company release Monday. “With greater scale and broader product diversification, the combined company will be positioned to deliver more advanced semiconductor solutions for our global customers and drive enhanced stockholder value.”

Qualcomm, based in San Diego, said that it is reviewing the bid, and that it will have no comment until that review is completed by its board.

Marriage of Wi-Fi, wireless

What could be the second-biggest deal in American corporate history could be a marriage between Wi-Fi and wireless.

If completed, it would tie up two seemingly complementary chipmaking behemoths.

Qualcomm made its name inventing the 2G and 3G wireless network technology used by Verizon and Sprint. Now the bulk of its sales come from mobile chips powering the brains in smartphones and the radios that enable cellular communications.

Broadcom primarily makes chips for wired broadband communications, including modems, Wi-Fi, switches and routers.

The deal comes just as every wireless carrier in America is about to unleash its 5G technology. Unlike 4G, 3G and 2G before it, 5G will rely on wired and wireless technology working in tandem.

Because of how 5G technology will be built, wireless carriers will have to deploy small radios — essentially mini cell towers — all around the covered area. Each of those towers will need an Ethernet connection. If Broadcom and Qualcomm combine, it could market itself as an end-to-end 5G technology provider.

Qualcomm has endured a miserable 2017, mainly because of an epic standoff with Apple. Qualcomm claims Apple violated some its patents and is trying to block iPhone sales in China. Meanwhile, Apple is rumored to be building a future iPhone without Qualcomm components.

Although Qualcomm briefly became the world’s largest chipmaker, it was leapfrogged by Intel and then Samsung earlier this year. The company’s stock has fallen 5% this year — an opportune time for Broadcom to buy it.

Antitrust concerns?

The deal could invite antitrust concerns. Both companies are big players in the high-end Wi-Fi market, notes Christopher Rolland, semiconductor analyst for Susquehanna.

Another complication: Both companies are in the middle of buying other chipmakers. Qualcomm has agreed to buy NXP, and Broadcom is buying Brocade.

The only larger deal in U.S. corporate history was AOL’s $162 billion deal for CNN parent company Time Warner in 1999. The Broadcom-Qualcomm deal would be tied with Verizon’s $130 billion purchase of half Vodafone’s Verizon Wireless stake in 2013, and Dow’s $130 billion merger with DuPont in 2015.