Qorvo and Skyworks Are Weighing Bids for Broadcom’s RF Chip Business

Semiconductor makers Qorvo and Skyworks Solutions are weighing bids for Broadcom's RF chip business amid its disclosure of a $15 billion Apple components deal.
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Semiconductor makers Qorvo (QRVO) - Get Report and Skyworks Solutions (SWKS) - Get Report are weighing bids for Broadcom's (AVGO) - Get Report wireless-chip business at the same time that Broadcom has disclosed two component deals with Apple (AAPL) - Get Report that could net it $15 billion in revenue over the next three-plus years.

Citing people familiar with the matter, Bloomberg reported that the two chipmakers are looking at making a bid for Broadcom’s wireless-chip business, which could garner some $10 billion in a sale. The unit makes radio-frequency, or RF, chips.

Meanwhile, Broadcom on Thursday disclosed new agreements to provide components for Apple devices for several years. The disclosure, made public in a U.S. Securities and Exchange Commission filing, lets potential acquirers of the RF unit know that they’re buying into a substantial business relationship with Cupertino, California-based Apple.

The filing suggested total revenues from the two agreements could generate $4.3 billion per year, or $15 billion over the life of the contracts.

The RF unit’s chips are used to filter and amplify radio frequency signals. Its filters also let wireless communications systems support a large number of subscribers at the same time by ensuring that voice and data streams don’t interfere with each other.

Apple's iPhone 11 models, as well as the iPhone XS and XR, use Broadcom components such as an RF power amplifier module and a Wi-Fi/Bluetooth combo chip. Meanwhile, Apple is prepping its suppliers and manufacturers on a new, lower-cost iPhone that it wants them to begin assembling starting next month.

Skyworks shares in particular continued their downward trajectory on Friday, despite the company posting better-than-expected results for its fiscal first quarter.

Skyworks stock was down 4.1% at $122.89 in morning trading on Friday, while Qorvo stock was down 1.84% at $116.50. Shares of Broadcom, meanwhile, were up 3.31% at $330.24 in early Friday trading, while shares of Apple were up 0.48% at $320.77.