Broadcom chats with FTC and SEC over acquisition and tax shelter

Broadcom has been keeping its lawyers busy over the last couple of days, firstly responding to an FTC second request for information, and secondly, starting the redomiciliation to the tax shelter of Delaware.

Starting with the FTC and Broadcom’s proposed acquisition of Qualcomm, Broadcom announced that it has received a request for additional information and documentary material. This is of course a normal part of the acquisition process, but doesn’t tell us much about which way the FTC is leaning, even if the Qualcomm board is doing everything it can to resist.

The second request for information is part of the Hart-Scott-Rodino Antitrust Improvements Act of 1976. It essentially grants the FTC an additional 30 days to review any acquisition, to properly assess whether there will be negative impact to competition in the US.

Of course Broadcom is confident the move would do nothing but good things for the rollercoaster world of processors, but it is questionable whether the scale of acquisition is healthy. Qualcomm is in the process of acquiring one of the industry’s major players in NXP, potentially sucking up competition, and should Broadcom effectively be allowed to absorb both, some might argue this would be a negative for the industry.

Elsewhere in the Broadcom world, the team has also announced that it has kick-started the process to move its headquarters out of Singapore and into Delaware. Because the American dream is of course embodied by Delaware, please see below:

Uhlerstown-Frenchtown Bridge over the Delaware River Connecting

The process was set underway back in November, though now it is beginning to gather steam. Broadcom expects to receive approvals by shareholders and the Singapore High Court by the end of the second quarter, though there haven’t been any noises about moving it operating headquarters out to the glorious landscape which is Delaware.

So why Delaware you ask? Of course it has something to do with cash.

Along with Nevada, Delaware is seen as a tax shelter in the US, offering numerous benefits for corporations. Firstly, there is no sales tax in Delaware. Irrelevant as to whether its physical location is in the state or not, as a Delaware corporation, no in-state purchases are subject to tax.

Secondly, most states require a business to pay an annual franchise or LLC tax which is derived from revenues. Delaware operates on a different model, with a flat-fee franchise tax of $100 and a flat-fee LLC tax of $250.

Thirdly, there are privacy benefits, which is an interesting one. Local laws state privately held corporate business owners are shielded from public record. Irrelevant as to what papers are filed in the state, only the name of the entity and the name and address of the registered agent are required.

Finally, the state has a separate court system called the Court of Chancery, which allows corporate litigation to be handled locally as opposed to being escalated to federal court. Its quicker and cheaper.

For those who thought the Broadcom team might have a keen interest in the Hagley Museum and Library, or the Air Mobility Command Museum and Gordons Pond (some of the top attractions in Delawre, according to TripAdvisor), think again. The new Delaware headquarters might be nothing more than one man in a room, answering the phone and Googling his name.

Samsung fuels chip launch with AI and speed promises

Ahead of CES in Las Vegas, Samsung has launched its latest blitz on the AI processor market, unveiling the Exynos 9 Series 9810.

Built with the upcoming AI revolution in mind, Samsung has said the chip features a 2.9 GHz custom CPU, a 6CA LTE modem and deep-learning processing capabilities. Build on Samsung’s second-generation 10-nanometer FinFET process, the team will hope to continue the very healthy progress this division has been making over recent months.

“The Exynos 9 Series 9810 is our most innovative mobile processor yet, with our third-generation custom CPU, ultrafast gigabit LTE modem and deep learning-enhanced image processing,” said Ben Hur, VP of System LSI Marketing at Samsung.

“The Exynos 9810 will be a key catalyst for innovation in smart platforms such as smartphones, personal computing and automotive for the upcoming AI era.”

Looking specifically at the LTE modem, Samsung claims it will be able to support 6x carrier aggregation for download speeds of up to 1.2 Gbps, and upload speeds of 200 Mbps. Should this turn out to be accurate, this would comfortably exceed todays maximums, now we just need devices which can support them.

Now the technical bit is over, the new chip will most likely feature in the next Galaxy S flagship device, powering features such as facial recognition and object detection, both of which are fast gaining mass market acceptance.

Energy efficiency will likely be another prominent feature for the phone, a selling point which has historically been popular with the Samsung marketing team. Considering the PR headache Apple is facing with its batteries, Samsung might be able to benefit from the misery.