Published in PC Hardware

China's smartphone manufacturers fear a Broadcom takeover

by on25 January 2018


Could kill competition

Qualcomm has some heavy hitters who are supporting it in its fight against Broadcom's $130 billion bid for Qualcomm.

 Xiaomi, Oppo and Vivo, among the biggest names in the smartphone manufacturing business, believe that the deal would hamper innovation and cause widespread uncertainty.

According to Bloomberg, the companies claimed that the combination of these two companies would generate a monopoly that would affect growth and fair competition in the sector.

They're also worried that the deal may affect research and development in the semiconductor industry, with so much of the market tied up in one, highly leveraged company that could nevertheless see off all-comers.

The companies are all customers of Qualcomm chipsets and mobile processors, and their opposition may in part be instigated by Qualcomm as part of its defence against the hostile takeover.

Xiaomi co-founder Lvin Bin said: "The thing we worry about the most is if it were completed, will there be continued investment in the future? Without the investment, the entire industry will not grow well. So from this point of view, Xiaomi fully supports Qualcomm."

Oppo said Broadcom doesn't have the best track record for technology development, a claim supported by ZTE and Lenovo.

Oppo founder and CEO Tony Chen feared the development of monopolies in various segments of the semiconductor industry: "I'm not very familiar with that company but what I heard was they are good at making financial moves.

"If that's the case, I think there's a possibility of a monopoly. I don't think it is good news for the industry and customers."

Shen Wei, CEO in Vivo, also criticised the deal: "We don't want changes because they will bring uncertainty."

All this might give some power to Chinese regulators to block the deal behind the Bamboo curtain, which could kill off the takeover completely. After all, if a united Broadcom/ Qualcomm company could not sell chips in China, it would be dead in the water.

Last modified on 25 January 2018
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