Broadcom throws in the baseband processor towel

And yet the number of companies producing the bits and pieces at the heart of a mobile phone continues to decline. The latest to throw in the towel is Broadcom, which announced last week that it is seeking a buyer for its baseband processor activities. If a buyer can't be found, the unit will close. The list of casualties is almost an A to Z of the semiconductor industry; those who have quit the baseband market range from Analog Devices to Texas Instruments, via NXP and ST-Ericsson. Part of the problem is the complexity of developing baseband processors – the components which handle a phone's radio functionality. According to market researcher Strategic Analytics, Broadcom has invested around $3billion in baseband R&D over the last few years and has a market share of less than 5% to show for it. Another issue is the handful of customers available. Ask someone to name a smartphone company and the chances are there will be a long silence after Apple, Nokia and Samsung and maybe a mention of Blackberry. Unless companies get that 'socket' in the latest smartphone from a market leader, their available market shrinks dramatically and they effectively watch from the sidelines. Broadcom tried to get ahead of the market last year, when it acquired Renesas' LTE business. At the time, it said it was getting a device that was ready for volume production. But the move appears to have failed; Qualcomm holds almost all the market for LTE baseband processors. In the broader electronics world, fewer and fewer companies are producing more and more of the 'smarter' products. Intel, TSMC and the like are investing eye watering amounts in order to make more and more devices that are smaller, consume less power and cost less. The economics of the electronics industry are now such that it is a very rich man's business.