If you are considering becoming a 1M/1M premium member and would like to join our mailing list to receive ongoing information, please sign up here.

Subscribe to our Feed

Broadcom: Strengths and Weaknesses

Posted on Wednesday, Dec 26th 2007

By Vijay Nagarajan, Guest Author

2007 has been a happening year for the wireless industry. Apple’s iPhone and Google’s Android are just two examples of how even outsiders want a part of this very luscious pie. 2007 was eventful for another reason – the legal battles between two American communication devices manufacturers – Qualcomm and Broadcom. I have drawn from the legal wrangling between these giants to dissect the future of Qualcomm. In the coming weeks, I hope to similarly review the fortunes of Broadcom. It will be good to start with a perspective on the company’s strengths and weaknesses.

Broadcom was started in 1991 by Prof. Henri Samueli from UCLA along with Henry Nicholas III, a former student of his. As its name indicates, it was started with the idea of selling broadband communications solutions. It is illustrative to take a quick look at Prof. Samueli’s background to understand the strengths of Broadcom as a company. He founded Broadcom to leverage his interests in digital signal processing, communications systems engineering, and CMOS integrated circuit design for high-speed data transmission systems. The company, even today, takes pride in its proprietary DSP hardware architectures, system-on-a-chip design methodologies, high-performance CMOS designs for RF, analog and mixed circuits and its custom microprocessor architectures.

The company’s strengths are especially interesting in the context of its much touted entry into the mobile space. While these strengths are imperative to the company’s success in this space, they also highlight an important weakness – the de-stressing of the theoretical underpinnings in their design and development process. Mobile wireless communications is severely constrained by power and also faces interference issues. Besides, there is and will continue to be competition for spectrum, and receiver algorithms need to be designed with that in mind. It is therefore important to understand the theory behind the system design. An ideal company needs a balance between the theoretical notions and the system design.

Broadcom has definitely sought to address this traditional weakness by roping in bright information theoreticians. Chief among them is the VP and CTO of the mobile and Wireless group, Dr. Nambi Seshadri. I have great respect for Dr. Seshadri, who in 1999 was the co-recipient of the Best Paper Award from the IEEE Information Theory Society (essentially the highest recognition accorded to information theoreticians around the world).

So, like most semiconductor companies, Broadcom’s traditional strengths are in circuit design. It perceives mobile communications as an application of its strength. With its relatively late entry into the mobile space, BRCM’s long-term interests will hinge on its successful trial and delivery on the chip announcements made this year. The success will not only be measured by price and inter-operability but also on relative performance. Therein lies the company’s uphill battle.

In the next few articles in this series, we will look at the company’s growth and businesses and how they fit into its future plans.

This segment is a part in the series : Broadcom

Hacker News
() Comments

Featured Videos


I do not understand why Broadcom
keeps falling…it appears to have new
products daily and yet it is at an all-time
low. Should I just sell now to stem
more losses?

Rosalie Tuesday, February 19, 2008 at 12:56 PM PT

Hi Rosalie,

I think you should read the rest of Vijay’s series, and see where the valuation analysis leads us.


Sramana Mitra Tuesday, February 19, 2008 at 9:15 PM PT

[…] is part 4 in a running series The Breadth and The Blur →Jump to part: Broadcom, Broadcom, Strengths and Weaknesses, Resilient Core, The Breadth and The Blur, Growth by acquisition, Enterprise Networking Business, […]

Broadcom: Resilient Core - Sramana Mitra on Strategy Monday, February 25, 2008 at 11:26 AM PT

[…] deep-dive analysis of the world’s leading mobile chipset vendor, Qualcomm (QCOM). More recently, I looked at the fortunes of Broadcom (BRCM), the company involved in several legal battles with the San-Diego based Qualcomm. Over the next few […]

Texas Instruments: Semiconductor Leadership - Sramana Mitra on Strategy Monday, March 17, 2008 at 9:03 AM PT