Semiconductor firm Broadcom said it is assessing “strategic alternatives” for its cellular baseband business, including a sale or even winding it down entirely.
The US firm has appointed investment bank JP Morgan to advise.
A sale or wind-down of the mobile business is expected to result in a roughly $700 million reduction in Broadcom’s annualised GAAP research and development and selling, general and administrative expenses, the company said.
Of this sum, about $100 million relates to estimated reductions in stock-based compensation.
Non-GAAP research and development and selling, general and administrative expenses are currently expected to be reduced by roughly $600 million.
The vendor said these figures do not reflect the impact of a potential impairment and/or restructuring charges following any sale or wind-down.
Broadcom expects to organically reinvest $50 million of these savings on an annualised basis into projects in its broadband, infrastructure and connectivity businesses.
The business has been under scrutiny for a while. Late last year Stuart Robinson, a director at Strategy Analytics, warned in a research note: “Broadcom is still a minor player in the baseband market and cannot afford any missteps as the year 2014 is shaping up to be an important one for the company… Only a successful LTE execution in 2014 will secure the long-term outlook for Broadcom’s mobile & wireless business division.”