MediaTek Dismisses Broadcom Merger Rumors As "Groundless"

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MediaTek Chief Financial Officer David Ku dismissed recent rumors of a Broadcom merger as "groundless," having issued a statement that explicitly asserts the Taiwanese semiconductor company held no talks with the tech giant over a potential tie-up. Reports of talks between the two being underway initially emerged last week, with industry sources claiming Broadcom Chief Executive Officer Hock E. Tan and MediaTek Chairman Tsai Ming-Kai met in Singapore to discuss preliminary terms of a hypothetical deal. Nikkei on Wednesday also reported that Broadcom approached MediaTek to express interest in a consolidation, with that claim being made after Mr. Ku said no such development occurred.

Broadcom is still in the market for a major acquisition in the chip industry after unsuccessfully pursuing Qualcomm for four months as part of a historic episode that saw some unprecedented moves being made on both sides, with the affair ultimately being put to an end by President Donald Trump in an equally unconventional manner. MediaTek is the world's second largest chipmaker after Qualcomm and could hence be Broadcom's plan B, though the Singapore-based tech giant is understood to have primarily targeted the American firm due to its 5G modems and related wireless technologies and not its general chip business. While MediaTek has also been investing in 5G research and development in recent times, the Taiwanese company cannot rival Qualcomm and a number of other pioneers in the segment, according to some industry watchers.

Nikkei also reports Mr. Tan already visited MediaTek's HQ last year for an unspecified reason, though it's presently unclear whether the meeting took place before Broadcom officially approached Qualcomm in early November. Many industry analysts believe Broadcom's failure to acquire the San Diego-based chipmaker won't dishearten it and expect the firm to continue pursuing M&As in an extremely aggressive manner. The technology industry as a whole is likely to undergo some major consolidations in the coming years as the advent of 5G and other emerging innovations reshapes the modern economy, according to some predictions.

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