Qualcomm Reportedly Close to Buying Atheros

Wireless technology provider Qualcomm is in advanced talks to acquire Atheros Communications, a major vendor of Wi-Fi chips, according to news reports on Tuesday.

The potential deal might come as early as Wednesday but could still fall apart, The New York Times and The Wall Street Journal both reported, citing unnamed sources.

Qualcomm pioneered CDMA (Code Division Multiple Access) and provides chips and licensed technology for a variety of mobile platforms, including the emerging LTE (Long-Term Evolution) broadband system. Atheros sells silicon for Wi-Fi networks and devices and for some other technologies, including Ethernet and GPS (Global Positioning System). An acquisition might help Qualcomm to integrate more new networking capabilities with cellular chips and to make greater inroads into the wireless LAN arena and devices such as laptops.

Atheros shares on the Nasdaq (ATHR) rose US$6.98 to $44.00 on Tuesday as reports about the possible deal surfaced. At that price, the company has a market value of just over $3 billion. Atheros is based in San Jose, California, and was founded in 1998. On Monday, it announced power-efficient combination Bluetooth and IEEE 802.11n Wi-Fi platforms for laptops, tablets and desktops.

Qualcomm, based in San Diego, recently announced it would discontinue its FLO TV mobile broadcasting network and sell the radio spectrum to AT&T for $1.925 billion. [b] On Monday, the company announced it would build a $1 billion plant in Taiwan to make low-power color displays for mobile devices. Its stock (QCOM) rose $0.79 to $50.97 in Tuesday trading on the Nasdaq.

Atheros and Qualcomm could not immediately be reached for comment.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

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