), world's largest chipset maker, has acquired Sunnyvale,
California-based Summit Microelectronics - a developer of
programmable power integrated circuits. The financial terms of the
deal are yet to be disclosed though we expect the acquisition to
improve Qualcomm's power management and battery charging
Summit Microelectronics makes highly integrated power management
solutions that regulate battery power for mobile phones, tablets
and e-readers. Summit possesses key products, technologies and
design innovations in battery charging and DC-DC converters, which
will help Qualcomm to broaden its product portfolio.
The advent of 3G wireless technology has spurred the adaptation
of smartphones and tablets with advanced computing capacities and
high resolution screens. In addition, the introduction of superfast
4G LTE technology needs to be supported with LTE enabled
These state-of-the-art technologies enable customers to download
and transfer data, songs and videos much faster than before.
However, in order to support these technologies, a smartphone
should be backed up with sophisticated battery
We believe that the Summit acquisition will help Qualcomm
enhance the battery life of the devices, thus increasing the
competitiveness of its proprietary chipset solutions. The San
Diego-based company already has an impressive customer base which
includes the likes of
) and Samsung Electronics among others. The acquisition will
further help the company to meet the complex design needs of a
broader customer base.
This is the third acquisition by Qualcomm in almost a year and
second in the last six months after the company purchased a large
portfolio of assets and technology from HalolPT, which provides
wireless charging technology for electric road vehicles. However,
in spite of its acquisition spree, the telecommunications giant
continues to face stiff competition from
) and ZTE corp.
We are maintaining our long-term Neutral recommendation on
Qualcomm. Currently Qualcomm has a Zacks #2 Rank, implying a
short-term Buy rating on the stock.
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