In early February, Chip maker Broadcom increased its offer for semi-conductor Qualcomm. In December, the offer was $70 a share made up of cash and stock, now the offer has climbed to $82 a share made up of cash and stock. The value of the total offer is about $146 billion. Josh O’Kane wrote it is a staggering figure given Qualcomm’s fight with Apple but demonstrates the industry’s rapid consolidation and just how valuable intellectual property portfolios can be.

The world’s semi conductor business is worth $US 412 billion according to the Semiconductor Industry Association. The combination of Broadcom and Qualcomm would make it number 3 after Intel and Samsung.  Broadcom would lead in WiFi chips.

Qualcomm is trying to buy NXP Semiconductors. Qualcomm is very well positioned to take advantage of cellphone coverage of 5G wireless.

The regulators would need to approve the merger for it to be completed.

Linking to dividend paying stocks, in all markets leaders tend to emerge, in new markets eventually consolidation happens for the leaders to compete but also to raise prices to earn higher margins. As long as that delicate balance happens, as a consumer you may wonder but as an investor you are happy.

There are more questions than answers, till the next time – to raising questions.