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Broadcom Corporation (BRCM)’s Rise in the Global Semiconductor Space

Apart from various local players, the company is working in close association with Samsung to drive its low cost smartphone range in China, India, and Southeast Asia.

Competitive scenario

QUALCOMM, Inc. (NASDAQ:QCOM) is one of the primary competitors of Broadcom Corporation (NASDAQ:BRCM). With solid fundamentals, QUALCOMM, Inc. (NASDAQ:QCOM) has managed to build up a huge market for itself. The company has been continuously dishing out strong financial performance for the past three years. FY 2012 saw the company achieve revenue amounting to $ 19 billion, up 28% year-over-year.

The company continued the trend through the first quarter of 2013 with revenue reaching $ 6.02 billion, up 29% year-over-year. The operating profit and cash flows for the quarter grew 35% and 33% year-over-year, respectively.

The major drivers behind Qualcomm’s sustained top line and bottom line growth are the ever-increasing penetration of smartphones and other 3G/4G devices on a global scale.

With the recent launch of Qualcomm’s Snapdragon 600 and 800 processors, the company is eyeing robust growth in its operations for the next year and beyond, and maintain its market leadership as the largest player in this segment.

Texas Instruments Incorporated (NASDAQ:TXN) is another player in direct competition with Broadcom. The company, with its large diversified product portfolio and strong free cash flow, looks very handsome on the financial side.

The company executed a significant shift in strategy in late 2012 as it exited the global smartphone and tablet chip market, focusing its attention on OMAP (Open Multimedia Applications Platform) business on embedded systems that power business tools and other products that don’t evolve as rapidly as mobile gadgets.

With 77% of company’s revenue in coming from the Analog and embedded segment, the shift in strategy would allow the company to grab a substantial share of the market which is expected to be worth $18 billion.

Moving ahead, Texas Instruments Incorporated (NASDAQ:TXN)’ recent moves are giving a positive signal of the company’s clear intention of playing to its strength’s, and favorably leverage its growth trajectory in the coming times.

Broadcom: A definite addition to your portfolio

In a world continually witnessing new inventions and emerging technologies, Broadcom is placed in a very interesting situation and looks set to reap massive benefits out of this.

Continued focus on innovation, coupled with strategically placing itself in key emerging markets and offering a diverse product pool make this company a good bet and a capable competitor to bigger rival Qualcomm.

Considering the above factors, Broadcom is a suitable long-term investment and a worthy addition to diversify your portfolio.

Rashmi Singh has no position in any stocks mentioned. The Motley Fool owns shares of Qualcomm.

The article Broadcom’s Rise in the Global Semiconductor Space originally appeared on and is written by Rashmi Singh.

Rashmi is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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