Should Broadcom decide to pursue a deal, it would be the biggest takeover bid in the semiconductor business to date.
Qualcomm, a longtime giant of the computer chip industry that has fallen on hard times of late, may find itself a takeover target for a fast-rising upstart.
Broadcom, which in just eight years has become a formidable competitor in the semiconductor industry, is weighing a takeover bid for Qualcomm, two people briefed on the matter said on Friday.
Should Broadcom decide to pursue a deal, it would be the biggest takeover bid in the semiconductor business to date. As of Friday afternoon, before Bloomberg News reported on Broadcom’s deliberations, Qualcomm had a market valuation of about $81 billion. A bid could come as soon as this weekend, said the two people, who spoke on the condition of anonymity because the deliberations were still private.
A spokeswoman for Qualcomm declined to comment, while a representative for Broadcom did not return requests for comment.
Qualcomm has been grappling with a sagging stock price — it was down 20 percent in the 12 months that ended Thursday — and a long and bruising legal fight with Apple. This week, the company sued Apple, accusing the iPhone maker of violating a software license agreement to help out Intel, whose rival modem chips are used in newer iPhones.
And Qualcomm has not yet completed its $38.5 billion takeover of another chip maker, NXP Semiconductors, a transaction meant to help diversify its business away from smartphones. What would happen to that planned takeover if Broadcom acquired Qualcomm was not yet clear.
While Qualcomm has suffered several misfortunes in the last several years, its potential pursuer has enjoyed far better success of late.
Broadcom’s leadership traces itself back to Avago Technologies, a company that went public in 2009. At the time, it was just another small player in the semiconductor industry, worth $3.5 billion. But it has embarked on a breathtaking acquisition spree since then, driven by the soaring ambitions of its chief executive, Hock Tan, and backed by the big investment firm Silver Lake.
Two years ago, Avago struck its biggest deal to date by buying Broadcom, whose chips are used in smartphones and networking devices, for $37 billion. Mr. Tan’s company adopted its target’s name — and did little to hide its desire to hunt even bigger game.
Despite Mr. Tan’s well-known dislike for the spotlight, Broadcom took a big step into prominence on Thursday when he appeared with President Trump at the White House to announce that the company would move its legal base to the United States.
Broadcom, which has long maintained a headquarters in Singapore for tax reasons, as well as in San Jose, Calif., said the move was inspired in part by Republicans’ efforts to overhaul the American tax code. The return to the United States, Mr. Tan said, would shift $20 billion in revenue back to America, making it subject to corporate taxes in the United States. The administration’s tax proposal would cut corporate tax rates sharply, to 20 percent, from a nominal 35 percent.
The plans led Mr. Trump to praise Broadcom as “one of the really, great, great companies.”
But Broadcom executives stressed that the move was not dependent on the passage of tax legislation.
A different policy consideration, analysts say, is the prime motivation.
“This is all about freeing up Broadcom to make acquisitions,” said Romit Shah, an analyst for Nomura Instinet. “And Qualcomm has been at the top of Broadcom’s wish list for a long time.”
The hurdle that Broadcom has faced as a foreign-based company is apparent in the trouble it has encountered with its pending purchase of Brocade Communications Systems, announced last November at $5.5 billion.
That deal has been delayed three times by issues that cropped up during the review by the Committee on Foreign Investment in the United States. The government body scrutinizes bids by overseas companies to buy American corporations that control technology that may be deemed strategic for either economic or national-security reasons.
