$130-Billion Takeover to Shake Up the Chip Industry?

Semiconductor maker Broadcom made a bid to acquire its rival Qualcomm on Monday in a deal that would be the largest takeover in the tech industry to date. Broadcom has offered to buy all of the outstanding shares of Qualcomm for $60.00 in cash plus $10.00 per share in Broadcom shares. The proposed deal would amount to roughly $130 billion and instantly propel Broadcom to third place in the global semiconductor industry. As our chart illustrates, Broadcom and Qualcomm had a combined market share of 8.4 percent in the ever-growing semiconductor industry last year.

Broadcom's offer comes at a surprising time, considering that Qualcomm is currently entrenched in a legal battle with one of its biggest customers, Apple. After the iPhone maker had sued Qualcomm for "charging royalties for technologies they have nothing to do with", the chipmaker sued Apple back for allegedly sharing information with semiconductor market leader Intel.

Global semiconductor sales have risen sharply over the past two decades as the rise of mobile devices has led to a steep increase in demand for microprocessors and memory chips. In 2016, worldwide semiconductor sales amounted to roughly $340 billion, up from $204 billion at the turn of the millennium.