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Broadcom Corporation (BRCM) vs. QUALCOMM, Inc. (QCOM): Which One of These Semiconductor Stocks Is Worth Buying?

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Broadcom Corporation (NASDAQ:BRCM) began shipping its fifth generation, or 5G, WiFi family of semiconductors last year. The 5G technology helps wireless devices work faster and carries signals farther with reduced battery drain than previous generations, Broadcom Corporation (NASDAQ:BRCM) said. The company also expanded its wireless product portfolio with NFC quad-core chips, which target growth in mass market mobile phones as well as high-end mobile phones and devices.

Broadcom (BRCM)

Broadcom Corporation (NASDAQ:BRCM) closed its fiscal 2012 with an 8% increase in annual revenue as it gained additional market share in all of its business segments — connectivity and baseband, network solutions, and broadband. This article explains why Broadcom Corporation (NASDAQ:BRCM) is relatively undervalued than arch-rival QUALCOMM, Inc. (NASDAQ:QCOM), and therefore offers a better investment proposition.

The wireless semiconductor market

The wireless semiconductor market is made up of two different markets:

1. Mobile baseband chipsets and application processors market

2. The wireless connectivity solutions market

Broadcom leads the wireless connectivity segment

Broadcom Corporation (NASDAQ:BRCM) is the leader in the wireless connectivity segment with approximately 35% market share. This is the fastest growing segment in the wider semiconductor market. The opportunity in wireless connectivity is primarily driven by the growth of mobile devices. Broadcom’s market share in mobility is 90%, which comprises WiFi, Bluetooth, FM, and GPS solutions solely for mobile platforms. Almost all high-end smartphones use Broadcom Corporation (NASDAQ:BRCM)’s connectivity solutions.

The company has enjoyed major success with its connectivity solutions in smartphones, most notably the main WLAN slot in the iPhone. Broadcom shipped around 200 million connectivity combos in Q4 2012 alone, and its wireless connectivity solutions grew faster than its overall mobile and wireless business in 2012.

Broadcom says that it has invented a chip that can tell your phone where you are all the time without quickly draining your battery. The BCM47521 chip will make it easier to use apps that react to the user’s location. That could include tools that mute an employee’s ringer when they enter the office, send a text message when a child leaves school, or tell a retailer when a loyal shopper is near a store.

Broadcom also claims that it has the industry’s smallest 4G LTE-Advanced modem, theBCM21892. The modem is said to support LTE FDD and TDD, LTE-Advanced with carrier aggregation, HSPA+, TD-SCDMA, and EDGE/GSM. It also supports Band 41 TD-LTE, used by Clearwire, China Mobile, and SoftBank.

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