Cellular baseband processors handle the radio communications between the mobile device and the access network and Broadcom’s baseband business has been losing market share due to competition.
Late to the 4G chip market, Broadcom has also had to compete with market leader Qualcomm. Shutting down the baseband business could save the company around $700 million a year, allowing it to recycle $50 million per year into other areas of the business.
Broadcom has signalled its intention to focus on small cells, embedded processing and low-power connectivity in an effort to boost margins.
"This incremental spending is currently expected to strengthen and accelerate the company's plans in the area of small cells, embedded processing and low-power connectivity," Broadcom said in a statement.
The company has hired JP Morgan to advise it on its options.
