Broadcom | History, Acquisitions, Controversies, & Facts

The Palo Alto, California–based company plays a critical role in industries ranging from data centers to cybersecurity. But Broadcom’s story is more than one of innovation: It’s a narrative of bold acquisitions, regulatory scrutiny, and efforts to shape the technologies of tomorrow.

Broadcom’s technology products and services

Broadcom structures its commercial offerings into two categories—products and solutions.

Broadcom’s products include hardware like network storage and system components, essential for cloud computing and data storage; wireless network infrastructure, like Wi-Fi systems and components that enable mobile connectivity; and optical products such as LED displays used in consumer electronics. On the software side, Broadcom creates tools for running applications on mainframe computers, automating repetitive business tasks, and securing systems against cyberattacks.

Its solutions are designed to address specific challenges facing businesses and industries. Examples include broadband and wired networking systems that connect homes and offices to the Internet; wireless and mobile communication systems for smartphones and other devices; and the hardware and technologies used at data centers to store, process, and analyze large data sets.

Also included are products for corporate customers to improve security, such as zero-trust systems that restrict access to verified users and cybersecurity tools for industries such as financial services. For companies using mainframe computers, Broadcom sells hardware and software that help integrate AI into their operations, enabling older systems to process and analyze modern workloads.

VMware’s role within Broadcom

VMware, spun off from Dell Technologies in November 2021 and acquired by Broadcom in 2023 for $61 billion, is known for making virtualization software that allows one computer to act like many machines, making computing more efficient. VMware also develops software for managing data centers, making it a key part of Broadcom’s strategy to expand its cloud computing presence and enterprise technology—tools and systems designed to meet the complex needs of corporations and other large organizations.

VMware’s virtualization software complements Broadcom’s focus on data center technologies, creating synergies that enhance both cloud management and AI workloads.

Broadcom’s evolution from HP to a global tech leader

HP origins. The organization known today as Broadcom began as a division of Hewlett-Packard in 1961. The HP team introduced the first commercially available LED billboards in the 1960s. In the 1970s, HP developed technologies such as the HP interface bus, a system that standardized communication between instruments and computers, helping to establish its role in data communications.

By the 1990s HP was manufacturing semiconductors, advancing computer mouse technology, and producing a modem that enabled cable television providers to offer Internet access. About the same time, Henry Samueli and Henry Nicholas founded Broadcom Corp. in 1991 to develop technologies, such as computer chips and network hardware, that supported high-speed (broadband) Internet access.

The Avago period. In 1999, Hewlett-Packard reorganized its business, spinning off several divisions into a new company, Agilent Technologies. What was HP’s semiconductor business became part of Agilent’s newly formed semiconductor products group. Six years later, Agilent sold the division to two private equity firms, which created Avago Technologies. Avago went public in 2009, trading on the Nasdaq under the ticker symbol AVGO.

Broadcom renaming. For the next seven years, Avago grew through organic expansion and acquisitions. In 2016, Avago acquired Broadcom and adopted its name to capitalize on its stronger reputation in the technology industry, while continuing to use the AVGO ticker.

Growth through acquisitions

Acquisitions have been central to Broadcom’s strategy, enabling it to move beyond its semiconductor roots into areas such as software, cybersecurity, and other high-growth markets.

Major acquisitions. In addition to VMware, Broadcom has made other significant purchases to diversify its business. In 2018, Broadcom acquired CA Technologies for $18.9 billion to strengthen its line of software products and expand beyond hardware. A year later, Broadcom bought Symantec’s enterprise security business for $10.7 billion, establishing a strong foothold in the growing field of cybersecurity. The acquisition of CA Technologies brought expertise in enterprise software, while the Symantec deal marked Broadcom’s entry into cybersecurity.

Challenges along the way. Not all of Broadcom’s acquisition attempts have been successful. In 2018, the company sought to acquire Qualcomm, a key player in wireless communication technologies. President Donald Trump blocked the deal through executive order, citing national security concerns. The failed bid highlighted the challenges Broadcom faces in navigating complex regulatory environments.

Legal challenges and controversies involving Broadcom

Stock options backdating scandal. In 2008, Broadcom agreed to pay $12 million to settle Securities and Exchange Commission (SEC) charges that it falsified its reported income by backdating stock-option grants from 1998 to 2003. The company neither admitted nor denied the charges. Broadcom restated its financial results in January 2007 and reported more than $2 billion in additional compensation expenses because of the backdating, the SEC said.

Antitrust investigations and fines. Broadcom has faced several investigations into anticompetitive practices in the semiconductor industry:

• In 2020, the European Commission concluded that Broadcom had restricted competition by imposing exclusivity agreements on TV set-top box and modem manufacturers. Although no fines were issued, Broadcom agreed to end the agreements, and said it was “pleased to have reached this resolution.”
• In 2021, the Federal Trade Commission (FTC) accused Broadcom of monopolistic practices, alleging the company used long-term contracts to prevent manufacturers and service providers from purchasing chips from its competitors. Broadcom agreed to stop entering into exclusivity or loyalty agreements with customers as part of the settlement, without admitting wrongdoing.
• In 2023, South Korea’s Fair Trade Commission fined Broadcom 19.1 billion won ($14.3 million), saying it abused its market dominance. The regulator said it determined Broadcom had pressured Samsung Electronics into an unfavorable long-term supply agreement in 2020. Broadcom said it planned to appeal.

Patent disputes with Netflix. Broadcom has also engaged in patent disputes, notably with Netflix (NFLX). In 2023, Broadcom alleged that Netflix had infringed on several of its patents related to video streaming technology. A German court partially upheld Broadcom’s claims, issuing an injunction against Netflix in September 2023. Later that year, the court fined Netflix €7.1 million ($7.8 million) for continued patent infringement.

Building hardware for AI systems

Broadcom develops hardware and technologies, such as specialized chips and networking components, to meet the growing demands of AI. These innovations reduce electricity consumption and maintain performance as AI networks expand. Broadcom also supports open development standards—shared frameworks that allow AI hardware from different providers to integrate seamlessly.

Broadcom’s transformation into a tech powerhouse

Broadcom has grown from its beginnings in semiconductors to become a critical player in industries ranging from cybersecurity to enterprise software. Through strategic acquisitions and innovative product development, the company has diversified its portfolio of products and services and established itself in high-demand markets such as cloud computing and artificial intelligence. Its focus on AI and cloud technologies positions it to continue shaping the future of technology, even as it navigates ongoing regulatory and competitive challenges.