The value of Broadcom's bid has not been decided, though an offer in the range of around US$70 to US$80 per share is being contemplated, one of the sources said.
Qualcomm is not aware of the details of Broadcom's bid, and it is far from certain whether it will entertain this deal, the sources said.
Qualcomm declined to comment, while Broadcom did not immediately respond to a request for comment. Bloomberg says it could be for more than $100 billion. Broadcom, created in 2016 when Avago Technologies Ltd. acquired Broadcom Corp. for $37 billion, has built itself from a former Hewlett Packard division into one of the largest chipmakers via a string of purchases.
Qualcomm, based in San Diego, is also confronting headwinds in closing its $47 billion purchase of NXP Semiconductors. Yesterday it filed a suit against Apple in a California district court claiming that Apple breached its contract with Qualcomm by trying to pass information about Qualcomm's modem chip to other Apple employees who were working with Intel's component. Broadcom also supplies is a major supplier of parts for Apple's iPhone, and new management might be better positioned to resolve the dispute, Bloomberg noted. The company's modem chips have been used by Android manufacturers and by Apple since the very first iPhone. Purchasing Qualcomm would give Broadcom a much more lucrative line of business in the mobile phone markets. Qualcomm is looking to complete a $40 billion acquisition of NXP Semiconductors, while Broadcom has a $5.5 billion offer for Brocade Communications that it is waiting to complete.
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Qualcomm shares rose as much as 19 percent in NY in their biggest intraday move since October 2008, after Bloomberg News first reported the takeover plans.
Shares of Broadcom have rallied this year while Qualcomm has fallen, making the target more vulnerable. Qualcomm also faces a fine in South Korea of $853 million over alleged antitrust violations.
Both firms have been in the news the last few days. Qualcomm has countered that Apple, one of its largest customers, has lied to regulators in an unfair attempt to bully its opponent into charging less.