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Broadcom sheds 1,150 workers in race to bundle 4G silicon out the door

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Chip maker Broadcom will shed 1,150 jobs as it struggles to keep selling 3G tech while getting its 4G product line out of the door.

Revenue growth in the third quarter of 2013 was fairly flat for the company, which ships system-on-chips and communications ICs for use in mobile gadgets: sales were up a smidgen on last year to $2.14bn from $2.12bn, and net income grew to $316m from $220m in the year-ago period. The markets, though, expected better.

Broadcom's specialist subject is silicon packed with integrated communications, but its integrated products don't support next-gen mobile broadband LTE so it's been forced to bang the Wi-Fi drum very loudly. The company sells system-on-a-chip (SoC) silicon into low-end handsets, but can't reach higher without 4G baked in.

Broadcom gave up developing its own 4G SoC with the acquisition of the LTE assets from Renesas Electronics, for which Broadcom paid $164m and completed the purchase on 1 October. That gives it a SoC with a couple of ARM Cortex-A9 cores supporting multi-band LTE, and is already stamped for approval by AT&T, Vodafone, EE and so forth, which should be attractive to mid-range manufacturers.

But that won't bring in revenue until the middle of next year, so in the meantime the company is busy cutting costs and spent $12m doing that in the third quarter, with another $20m expected to be spent before the end of 2013.

350 of the staff on the chopping block are at Renesas, while 425 are Broadcom workers whose skills are no longer required thanks to the acquisition, all of which was widely expected even if the details weren't known. That leaves another 375 to be cut from Broadcom to reduce costs, along with other savings all of which cost money in the short term. ®

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