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daveburstein
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The racial slurs should be pulled down
daveburstein   2/13/2018 8:03:57 PM
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I'm strongly opposed to the Broadcom takeover but not because Hock Tan has Chinese ancestry.  Chipmunk's question about protecting U.S. jobs and the industry is appropriate; Tan has a history of firing too many.  Qualcomm has issues, but it remains one of the greatest engineering companies in the world. Eviscerating it is not good for the country. Nor are the supersized firms that have taken over the industry. The poster wonders about the source of Hock's financing. I'm friends with one of his strongest supporters on Wall Street. His name is of Polish ancestry. The biggest U.S. banks are leading the $100B financing of the Broadcom bid. Dave Burstein

photoelectron
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Re: Who is behind Hock Tan ??
photoelectron   2/13/2018 5:56:28 PM
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Hock Tan is a US citizen. So the answer to your question as to who is behind Hock Tan is the same as who is behind you or me, the US. He has an excellent education (MS Mechanical Engineering, MIT, and MBA Harvard) and I recognize him as a very able business guy following the standard short sighted objectives of the US Financial Industry and US Management which are the cause of the decline in US industries.

chipmonk0
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Who is behind Hock Tan ??
chipmonk0   2/13/2018 3:16:09 PM
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Before starting his hostile bid for QCOMM, Hock Tan got cosy w/ Trump, had his picture taken w/ the President in the Oval Office, to get Trump's attention promised huge job creation in the US ! In other words Tan was first trying to create a political safety net in the US before tearing into QCOMM. Who does he really work for ? Who are his financial backers - just his fellow ethnic Chinese in Malyasia / SE Asia ? Or is he perhaps a "front" for Communist China trying a new tack to pirate / plunder IP from US semiconductor co.s  - after they had tried to directly strongarm / legally blackmail QCOMM into giving up their juicy CDMA IP ? Is anyone in DC really watching out for US industry and jobs ?  

realjjj
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CEO
..
realjjj   2/12/2018 6:37:21 AM
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If you look at their last fiscal year, R&D spending is 1/3 of their chip revenue so higher than the 20-25% norm.

But there is a lot more context. The R&D is for product to begin with and only a fraction is for cellular. Their model enables them to lower chip prices and put a lot more pricing pressure on the competition. It also enables them to spend on other segments, creating an unfair advantage. Ofc aside from all the other illegal practices like refusing to license FRAND.

If you look at licensing before the Apple conflict, they were getting towards 8 billion in yearly revenue with earnings before tax at over 80%. Income from licensing alone was higher than their total R&D spending by maybe some 20%- quick estimate. Doesn't quite also cover sales and marketing but does cover half of it and , with growth in 4G/5G, would likely fully cover that soon too. That's a very consistent free lunch that nobody else is getting- aside from Intel and their x86 monopoly.

Qualcomm can't change the current system as it would be considered to be against the interest of the shareholders so they have to be forced into it. They have their hands tied, until enough pressure is applied.

The most interesting part might be why Broadcom wants them. Folks will talk about NXP but that doesn't seem to be important as their offer stands even without NXP. Scale is ofc part of it but maybe the core reason is Broadcom realizing that Wi-Fi is on its last legs. Will take some years before 5G is affordable because govs and regulators are selling out so our digital roads are not built and operated like our physical roads - that leads to consumers paying 100 times more than they should. Still, Wi-Fi will have a hard time surviving in the long run and it's about the right time for Broadcom to prepare for that.

The biggest downside of this deal, redefines scale and starts another wave of consolidation. much larger than anything we've seen before.



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