Nvidia Acquires Icera as Baseband Chipset Market Heats Up

-18.91%
Downside
903
Market
732
Trefis
NVDA: NVIDIA logo
NVDA
NVIDIA

Nvidia (NASDAQ:NVDA) recently acquired Icera, which offers baseband processors for smartphones and tablets, for a valuation of $367 million in cash. [1] This acquisition gives Nvidia the chance to strengthen its chipset business, and compete against Qualcomm (NASDAQ:QCOM), Broadcom (NASDAQ:BRCM), Marvell (NASDAQ:MRVL), Infineon (now acquired by Intel (NASDAQ:INTC)) and Texas Instruments (NYSE:TXN). Qualcomm holds patents in CDMA, WCDMA, OFDMA technology, and is the leader in the baseband chipset market based on this technology with a share of around 65% as of 2010.

According to Nvidia, Icera is a perfect fit that will enhance its position in the baseband processor market. Baseband processors represent one of the fastest growing segments in the technology industry, at an estimated annual market size of about $15 billion. [1] Last year, Intel agreed to buy the baseband chipset player Infineon for a valuation of $1.4 billion. These trends indicate that the M&A market for baseband chipset players is heating up.

Our price estimate for Qualcomm stock, at $57.23, is ahead of market price.

Relevant Articles
  1. Will The Blackwell Launch Drive Nvidia Stock To $1,000?
  2. With A $2 Trillion Valuation, What Are The Risks For Nvidia Stock?
  3. Up 3x Over The Past Year, Will Q4 Beat Drive Nvidia Stock Higher?
  4. Up 3x This Year, Will The AI Surge Drive Nvidia Stock Higher Following Q3 Earnings?
  5. At $420, What Are The Risks For Nvidia Stock?
  6. What’s Next For Nvidia Stock After Blowout Q2

See our complete analysis for Qualcomm stock here

Notes:
  1. Nvidia press release, May 9th 2011 [] []