After upheaval, chip firm Broadcom rebounds

Scott McGregor, the chief executive of chip developer Broadcom Corp., is happy to talk about the expanding list of uses for his company's products — smart cars, for instance — and new innovations that will fuel his company's growth for years to come.

Just don't ask which cellphone he carries in his pocket.

Broadcom, based in Irvine, Calif., designs and sells chips that are used in Apple's iPhone as well as in smartphones that use Google's Android operating system, the iPhone's chief rival.

"I carry a variety of smartphones," McGregor said, politely declining to say which was in his pocket this day. "I deliberately cycle around different phones. I think it's important for me."

Today, most people find Broadcom's technology in their pockets, purses, homes and offices. Broadcom chips are in most high-end smartphones, Apple's iPad, laptops, routers, cable television boxes and even desktop computers.

More than 99 percent of all Internet traffic goes through at least one Broadcom chip, McGregor said.

Co-founded in 1991 by Henry Samueli and Henry T. Nicholas III, Broadcom has grown into one of the world's largest technology companies. But the company weathered a rocky stretch after Nicholas and Samueli were prosecuted in a stock-options backdating case.

Broadcom began shipping its fifth-generation, or 5G, Wi-Fi family of semiconductors last year, months ahead of its competition.

They were included in routers by Netgear, Belkin International, Buffalo Technology and others, as well as the Asus brand of notebook computers. HTC Corp. recently said its Android HTC One smartphones will use Broadcom's 5G chips.

The 5G technology helps wireless devices work faster and carries signals farther with reduced battery drain than previous generations, the company said. "We have a great track record of creating better chips than our competitors," McGregor said.

Of 11,300 employees, about 8,700 are in research and development. More than 850 Broadcom employees have doctorates. That's a lot of brainpower trying to make the Internet work better on phones and laptops.

"The Internet is groaning under the volume of streaming movies," McGregor said. "There's a lot of hard work to make the Internet go as fast as it goes."

But Broadcom's revenue is not tied exclusively to Apple. "While the battle between Apple and Samsung will wage on, we continue to view [chip] suppliers as a good way to avoid choosing the winner," Citigroup analyst Glen Yeung said in a research note.