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Brocade has put itself up for sale and indications are that Broadcom is interested. That could be a very imaginative purchase for BCOM, breaking free of traditional semiconductor consolidation and launching themselves into the networking equipment market. Then again, BCOM hasn't always been successful in branching into areas closely related to their core biz (applications processors for example). But 10 out of 10 for a big vision.
It looks like the deal is close to getting finalized, source CNBC. It looks like a wave of consolidation is taking place from the pace of deals in the semi industry.
It looks like the deal is close to getting finalized, source CNBC. It looks like a wave of consolidation is taking place from the pace of deals in the semi industry.
This is a somewhat perplexing acquisition... is Hock Tan running out of ideas? Broadcom has been very successful at being a consolidator in the semiconductor market, but semis have been consolidated to the point where there aren't that many good targets left and those potential targets seem to have a takeover premium built into the price. The problem I see is this is a vertical move from semiconductors into the OEM market. The competitive dynamics of the OEM market are very different from the semiconductor market. It an inherently a lower margin business, with more competition, and less pricing power. Not only that, but it puts Broadcom in direct competition with it's customers, and there is a risk that they could respond by designing Broadcom out of their products.
