Samsung Moves To Cut Out Broadcom In Smartphone Chips

English: Samsung Logo Suomi: Samsungin logo

English: Samsung Logo Suomi: Samsungin logo (Photo credit: Wikipedia)

Broadcom (BRCM : NASDAQ : US$29.60),

Losing chips.

 

Shares of Broadcom tumbled following word that Samsung Electronics acquired the mobile chip business of Cambridge Silicon Radio (CSR), a U.K.-based firm. The deal is another step in Samsung’s long-term strategy to in-source components for its handset business, as it has done so in memory, displays and application processors for many years and more recently for LTE basebands.

The South Korean handset giant is a crucial customer for Broadcom, leaving investors to fear that  the acquisition will weigh on future purchases from Broadcom. One analyst notes that the move is negative for the chipmaker, but not excessively so. Due to the length of the development and evaluation lifecycle required for handsets, Samsung will likely stay on its existing connectivity roadmap (including use of Broadcom’s combo chips) in the near/medium-term with the potential to adopt CSR acquired connectivity solutions likely to occur no sooner than 2015. Additionally, CSR’s parts are likely only for the low-end of Samsung’s handset lineup, with no 802.11ac or other next- generation features that would be found in premium smartphones

 

 

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