Broadcom expects to accrue the first revenue in early...
Broadcom expects to accrue the first revenue in early 2014 from its $164 million buy of Renesas Electronics’ LTE chip business, Broadcom CEO Scott McGregor said on an earnings call. Broadcom, which closed on the Renesas LTE acquisition earlier this…
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month, will initially field a dual-core 4G processor, which will be followed by a quad-core version later in 2014, McGregor said. Renesas, which announced plans to stop 4G wireless development in June, had a customer list that included AT&T, Vodaphone, Orange and NTT DoCoMo in Japan, industry analysts have said. Broadcom inherited about 1,200 Renesas employees along with the 4G assets, including several ex-Nokia chip designers who did some of the early work on 4G standards. The acquisition will enable Broadcom to strengthen a product line that already includes baseband processors, Bluetooth and Wi-Fi and NFC chips. The Renesas buy also will help Broadcom as it seeks to expand business for high-end LTE smartphones in China, company officials said. Much of Broadcom’s focus in China will be on smartphone suppliers like ZTE, which export products to the U.S. and other markets, McGregor said. As part of the Renesas purchase, Broadcom is taking a $20 million charge against Q4 earnings as it cuts 1,150 jobs, including 750 from its own ranks, McGregor said. The Renesas business is expected to add $65 million to Broadcom’s Q4 expenses, an amount that will decline to $45 million by late 2014, he said. Broadcom’s Q3 net income grew to $316 million from $220 million a year earlier as revenue rose to $2.14 billion from $2.04 billion. It incurred $12 million in restructuring costs in Q3.