Assets
Broadcom is headquartered in Singapore, but it does business mainly in Silicon Valley. Using technologies developed in the bowels of HP since the 1960s, she established the production of optical components and analog chips based on gallium arsenide and other promising materials. The company's microchips are widely used as components of smartphones.
Broadcom Products
Broadcom's main activity for 2024:
- Semiconductor Development and Manufacturing
- Create enterprise infrastructure software.
Key Product Applications:
- Mobile and Wireless Devices
- Network infrastructure
- Data centers
- Cloud Computing
- Internet of Things (IoT)
- Automotive electronics.
Broadcom was founded in 1991. It is fighting in the network chip market, in particular, with one of its main competitors - Qualcomm.
Business in Russia
According to information from the official Broadcom website, by the beginning of December 2017, the company does business in Russia through the following distribution partners: Asbis, Elko and 3Logic. They supply vendor solutions for wired and wireless communications, including network cards, RAID controllers and other components.
Performance indicators
2024
Capitalization growth by 76% over the year to $711 billion and 22 times over 10 years
Broadcom's capitalization in September 2024 is $711 billion (at its peak it was over $850 billion) with an increase of 76% over the year at a very high base.
Broadcom's capitalization has grown 5 times since the beginning of 2020 and almost 22 times in 10 years.
Rose, like many on AI data centers and cloud IT infrastructure for bigtechs.
Debt growth to $70 billion
The Q2 2024 report needs to take into account VMware's takeover effect in 2023 and Symantec's in 2019.
Broadcom increased its debt to $70 billion (!), Which is 3.5 times higher than the potential of operating cash flow.
- Revenue - $13.1 billion for 2Q24 (+ 47% YoY and + 137% over 5 years), but excluding VMware consolidation, revenue growth is only 4% YoY.
- Operating profit - 3.8 billion (-1.8% YoY and + 338% over 5 years).
- Net income - loss (!) of 1.9 billion due to a provision of 4.5 billion from the impact of intra-group transfer of certain intellectual property rights as a result of reformatting the supply chain.
- Operating cash flow -5 billion (+ 5.2% YoY and + 105% over 5 years).
- Capital expenditures - 0.17 billion for 2Q24 and only 0.5 billion for the year.
- Dividends and net baibek - 3.8 billion for 2Q24 and 21 billion for the year vs 14.8 billion for the previous year.
The company is rated inadequately expensive, Spydell Finance wrote. P/S is 15.6, which is three times higher than in 2019. P/OCF (to operating cash flow) over 37, similar imbalance for EV/EBITDA which is also three times higher than estimate in 2019, P/B twice as high as normal.
A bubble of at least 2.5 times of a fair estimate is likely.
2022: Share of business revenue in China - 35%
2021: Revenue - $27.45 billion, profit - $6.74 billion
Broadcom completed fiscal 2021 with revenue of $27.45 billion, 15% higher than a year ago of $23.89 billion.
Most of Broadcom's turnover (about 74%) comes from chip sales: the corresponding division registered revenue of just over $20.38 billion in fiscal 2021, which is 18% more than a year earlier. The company produces microcircuits for network and telecommunications equipment, servers and factory equipment.
In addition to chips, Broadcom also makes money on so-called infrastructure software. Over the reporting year, the company's revenues here reached $7.07 billion, rising 7% on an annualized basis. According to reports, Broadcom's software customers include about 80% of the largest Fortune 500 companies, which bring the manufacturer more than 70% of annual software revenue. In total, the software business accounts for 26% of sales.
Broadcom Software's annual recurring revenue has reached $5.2 billion, half of which is occupied by subscriptions. Broadcom Software management said the division has become focused on increasing the average term of contracts concluded and focuses on transactions worth more than $1 million per year. The company has more than 3,200 patents registered in different countries (by January 2022).
Broadcom Software includes the assets of previously purchased Symantec software developers (acquired enterprise business) and CA Technologies. In addition, in July 2021, rumors of a takeover of the SAS Institute took place in the media, but the deal fell through.
Broadcom's net profit in fiscal 2021 reached $6.74 billion, more than doubling relative to the result of 2020 ($2.96 billion).[1]
History
2022
Wi-Fi 7 Demo with Intel
Intel and Broadcom held a joint presentation to demonstrate successful data transfer over Wi-Fi 7 (802.11be) at speeds over 5 Gb/s. This is five times faster than the Wi-Fi 6 standard. This fat is known on September 9, 2022. Read more here.
Broadcom buys VMware for $61 billion
On May 26, 2022, VMware was announced to be sold to data center and chip software manufacturer Broadcom for $61 billion. The buyer will pay for part of VMware shares with its own securities, and the other part with cash. Read more here.
2021
Purchase of AppNeta Network Monitoring Software Developer
In early December 2021, Broadcom announced the purchase of AppNeta. The financial component of the transaction was not disclosed. Read more here.
Disruption of SAS Institute purchase deal
In mid-July 2021, it became known about the negotiations on the sale of the SAS Institute to the semiconductor giant Broadcom. The companies were close to striking a deal, but the founders of the business intelligence tool developer changed their minds about selling SAS literally at the last moment. Several people familiar with the situation told The Wall Street Journal (WSJ) about this. Read more here.
2020
Apple, Broadcom to pay $1.1 billion to steal iPhone technology
At the end of January 2020, a Los Angeles court ruled that Apple and Broadcom would have to pay the California University of Technology (Caltech) a total of $1.1 billion for violating the rights to several patents owned by the educational institution. Read more here.
Selling Symantec Cyber Security Services to Accenture
On January 7, 2020, Broadcom announced the sale of Symantec Cyber Security Services to Accenture. The latter, as a result of this purchase, will be able to better help anticipate cyber threats, detect them and respond.
The deal, scheduled to close in March 2020, was announced weeks after Broadcom formalized its acquisition of Symantec's corporate business. Part of it is Symantec Cyber Security Services, which provides services to protect companies from cyber attacks.
Symantec Cyber Security Services is based on a cloud platform that provides a continuous stream of technical threat data through a customizable portal. This service is used by many large companies representing sectors such as finance, healthcare, IT, telecommunications, retail and power.
The sale of Symantec Cyber Security Services has been anticipated since Broadcom President and CEO Hock Tan said in August 2019 that he plans to focus on Symantec's endpoint, website and data security products while reducing investment in less profitable areas.
 | With the Symantec Cyber Security Services business, we will now be able to offer our customers our shared experience, tailored to their industry, taking into account global threat analysis based on advanced analytics, automation and machine learning, said Accenture Security Senior Managing Director Kelly Bissell. |  |
According to her, the deal will help become Accenture more flexible, and not just a "universal" provider of information security management services. How much the company will pay for the acquisition of Symantec Cyber Security Services is not reported.[2]
2019
Among the largest companies in the semiconductor industry by revenue
Buying Symantec's enterprise business for $10.7 billion
On November 4, 2019, Symantec announced the closure of a deal to sell its corporate business to Broadcom for $10.7 billion. As a result, the American antivirus software manufacturer focused on consumer products and was renamed NortonLifeLock. Read more here.
Negotiations on the purchase of Symantec for $15 billion
On July 3, 2019, it became known that chipmaker Broadcom is at an advanced stage of negotiations to buy a protective developer. ON Symantec With the deal, Broadcom hopes to diversify the business by expanding it beyond the semiconductor sphere. The value of the transaction is estimated at more than $15 billion. More. here
2018
Purchase of software manufacturer CA Technologies for $18.9 billion
On July 11, 2018, semiconductor giant Broadcom announced the purchase of CA Technologies for $18.9 billion. The deal was announced four months after the US authorities banned Broadcom from absorbing chipmaker Qualcomm for $117 billion.
As noted, Reuters Broadcom's new takeover target surprised Wall Street. Investors and analysts tried to understand the meaning of the deal and suggested that its purpose was rather to invest money, and not to combine complementary divisions. Amid this lack of understanding, Broadcom shares fell 7% in price in electronic trading after the exchange closed on July 11. More. here
Trump blocks Broadcom-Qualcomm merger
In March 2018, US President Donald Trump blocked the potential sale of US microprocessor manufacturer Qualcomm to Singapore-based Broadcom for $117 billion. The Bloomberg agency found in Huawei the reasons for the breakdown of this deal. Read more here.
2017
Revenue growth thanks to Apple orders
In fiscal 2017, which ended on October 29, 2017, Broadcom's revenue amounted to $17.64 billion against $13.24 billion a year earlier.
The IT company recorded a net profit of $1.89 billion, while in 2016 there was an equal $1.86 billion loss caused by expenses on large acquisitions.
In addition, Broadcom's revenue growth was facilitated by strong sales of smartphone components, which were able to compensate for the vendor's weak performance in the key wireless infrastructure market, The Wall Street Journal noted.
Broadcom's report suggests that about 45% of the company's revenue comes from wired communications solutions. The share of revenues from wireless communications was 37%, from enterprise storage systems (DSS) - 13% (this also includes software sales ). The remaining 5% of the turnover fell on industrial and other products.
According to Broadcom CEO Hock Tan, the wireless solutions division showed growth thanks to an increase in the number of chips that the company supplies to new devices from "one major North American smartphone maker." Although the name of this customer has not been disclosed, Bloomberg observers understand that this is Apple.
After the publication of financial results, Broadcom shares rose in price by 1.3% (to $267.62) following additional trading after the exchange closed on December 6, 2017.[3]
Offer to buy Qualcomm for $130 billion
In early November 2017, Broadcom, one of the world's leading chipmakers, proposed the purchase of the American chipmaker Qualcomm for $105 billion. The deal, if concluded, will be the largest takeover in 2017: the transaction is estimated at about $130 billion, including Qualcomm's 25 billion debt. However, Bloomberg's informed sources warn that it will be very difficult to achieve a merger, as Qualcomm intends to resist the takeover.
Consent to Secession of Cisco-Related Business Following Brocade Purchase
In early July 2017, the Federal Trade Commission (FTC) ordered Broadcom to separate Cisco's contract-related business to prevent trade secrets from leaking after buying network equipment manufacturer Brocade for $5.9 billion.
Broadcom manufactures specialized chips (ASICs) on orders from Brocade and Cisco companies who use these solutions in their multi-channel fiber switches.
Broadcom has access to confidential Cisco data that could theoretically be tapped to limit competition and deter innovation in the global network equipment market, CRN IT reported, citing an FTC statement.
The merger of Broadcom and Brocade could hinder the development of healthy competition in the world, since the information owned by Cisco that the buyer has can be used both to "strengthen its own position in the market" and to "coordinate actions" with Cisco in order to increase prices for switches.
Broadcom agreed not to apply this trade secret for any purpose other than to develop, manufacture and sell ASIC solutions for Cisco. The agreement assumes that Broadcom, which is responsible for supplying network chips for Cisco orders, will receive separate enterprises and secure IT systems using a special firewall, which will be separate from the rest of the company's activities.
The FTC will personally monitor the implementation of this requirement for five years with the possibility of extending control by the same amount.
According to the FTC, by early July 2017, the deal to sell Brocade to Broadcom was reviewed by all relevant regulators. The deal is expected to close in August.[4]
2016: $5.5 billion Brocade purchase
On November 2, 2016, Broadcom announced the purchase of network equipment manufacturer Brocade Communications Systems for $5.5 billion. With this deal, the buyer will be able to expand their fiber and storage business. Read more here.
2013-2015
$17bn Broadcom takeover and renaming Avago Broadcom
Avago Technologies confirmed in May 2015 reports of the successful completion of negotiations on the acquisition of Broadcom. The company formed as a result of the merger will be one of the world's largest manufacturers of chips for network equipment. Avago will pay $17 billion in cash for Broadcom and approximately $20 billion in securities. Broadcom's capitalization, according to the latest estimates, is about $32 billion. Avago is valued somewhat higher, at about $37 billion. Reports of a possible deal raised the share price of both companies. After the deal closed, Avago was renamed Broadcom.
After the merger, the combined company's turnover is expected to reach $15 billion, and it will take seventh place between Qualcomm and Texas Instruments. According to observers, this will be achieved by the fact that the participants in the transaction have few intersections in products and many common customers. This will provide an opportunity to expand the product portfolio and at the same time gain an advantage in the eyes of customers who are trying to reduce the number of suppliers.
Avago's fiber optic components range from standard form factor active optical cables (AOCs) (SFP +, QSFP +, as well as CXPs), 1m to 20m long, and a wide range of optical transceivers from various form factors. They are intended for use in switching, routing equipment and high-load servers of all applications: from web applications and hosting services, computing clusters to Enterprise virtualization servers and cloud systems. The range of applications includes such popular network protocols as 1/10/40/100/400Gb Ethernet, 4-2-1/8/16/32 Gb Fibre Channel, DDR/QDR and FDR Infiniband, as well as many telecommunications applications, including SDH/Sonet networks. Avago has experience in the field of fiber optic technologies, and originates from the semiconductor division of HP, which began industrially producing the world's first optical transceiver back in 1978.
Avago technologies are also used in cellular base stations, data networks, telecommunications equipment, systems, data storage power plants, industrial automation devices and displays. Avago's customer base includes over 25,000 companies worldwide. Among them,, and Samsung Electronics Apple. Huawei Technologies The LG Electronics company's intellectual portfolio includes over 4.3 thousand applications and patents USA in other countries.
Take over LSI, PLX and Emulex and create a data center business
In 2013, Avago bought LSI for $6.6 billion, at that time it was one of the largest transactions, then acquired PLX for $300 million, and in 2015 - Emulex for $600 million. Through these three takeovers, Avago created a business to equip data centers. This direction is especially promising, its development spurs the demand for web services and cloud computing.
2009: Avago Stock Offering on the Stock Exchange
In 2009, Avago shares were listed on the stock exchange.
2005: Private funds buy out chip direction from Agilent Technologies for $2.66 billion
In 2005, a group of private equity funds led by Silver Lake and KKR bought one of the lines of business from Agilent Technologies for $2.66 billion.
1999: HP Electronics Line Spun Off to Agilent Technologies
In 1999, this area of electronics, along with some others, was separated from Hewlett-Packard in the form of Agilent Technologies.
1961: Hewlett-Packard sets up electronics development unit
The history of Avago began back in 1961, when an electronics division was created at Hewlett-Packard, which pioneered the field of LED displays, and then took up transmitters for fiber-optic communication lines, sensors for optical mice and other equipment.
Notes
- ↑ Broadcom Inc. Announces Fourth Quarter and Fiscal Year 2021 Financial Results and Quarterly Dividends
- ↑ Accenture To Buy Symantec Cyber Security Services Unit From Broadcom
- ↑ Broadcom Projects Robust Sales on Strong Smartphone Demand
- ↑ Broadcom Agrees Not To Leverage 'Confidential Information' From Cisco After Brocade Acquisition
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