Apple might snap up Broadcom’s RF chip business

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Broadcom
Broadcom has been supplying Apple with chips for years.
Photo: Florian Knodt/Flickr

Apple might be in the market to acquire the radio-frequency chip division from one of its biggest parts suppliers.

The Wall Street Journal reported today that Broadcom Inc is working with Credit Suisse to find a possible buyer of its RF wireless-chip unit in an effort to diversify its business and move more toward software. Although the names of companies potentially interested in the division haven’t been named, Apple observers are quickly pointing out that the iPhone-maker scooping it up makes the most sense.

Broadcom’s RF unit specializes in making RF chips for smartphones and other devices that filter out unwanted radio transmissions. The company has been a market leader when it comes to the chips but has started to face tougher competition from Qorvo Inc that developed alternate tech that’s smaller, reliable and could replace the type of filter chips Broadcom makes.

Creative Strategies founder and respected Apple analyst Ben Bajarin pointed out on Twitter that Apple recently began looking into creating its own RF chips. Broadcom has been one of Apple’s top suppliers since the original iPhone so it would make a lot of sense to just bring that division in-house.

Buying Broadcom’s RF chip division could be more costly than the deal Apple struck with Intel to buy its 5G modem team. The RF chip business brought in $2.2 billion in revenue during 2019, which could peg the acquisition price at $10 billion or more.

Apple is currently building a wireless chip team in San Diego. The iPhone-maker currently develops its own Bluetooth chips and iPhone and iPad processors. Adding more of its own chips built in-house would give the company more advantages for controlling and customizing the iPhone.