Qualcomm is not aware of the details of Broadcom's bid, and it is far from certain whether it will entertain this deal, the sources said.
A deal of this kind aligns with the current industry trend of consolidation, but also keep in mind that Broadcom is the largest maker of Wi-Fi chips in the world, while Qualcomm is the largest maker of modems. The unnamed sources also stressed that no final decision has been made, however, so there is still a chance for Broadcom to not proceed with a bid. No concrete decisions on the matter have yet been reached and it's now unclear what conditions would the semiconductor company be prepared to offer to Qualcomm and what level of a bid would the San Diego, California-based tech giant be prepared to consider. Broadcom's stock rose 4% to $271.09 a share.
Bloomberg broke the news Friday morning, saying people familiar with the matter are talking to advisers about bidding $70 a share, for a total of more than $100 billion, for Qualcomm.
More: Don't want an iPhone 8 or iPhone X? Qualcomm, based in San Diego, could become a key domestic asset for the company, as Broadcom already has a California co-headquarters in San Jose.
It's unclear how the deal could affect Qualcomm's own blockbuster $40 billion takeover of NXP Semiconductors, which was announced a year ago but still hasn't been completed. The chipmaker countersued the Cupertino-based company in April, sought injunctions to halt iPhone sales in the USA and China, and filed a lawsuit over copyright infringement.
A tie-up between the two chipmakers would be the latest in the semiconductor industry that has been rapidly consolidating as companies try to capture a big share of the fast-growing market for connected devices and connected cars. Broadcom is also a major supplier to numerous same companies for Wi-Fi chips.