When chips collide: Broadcom bids $105 billion for Qualcomm in largest tech deal ever

It's an interesting time for the guts of your smartphone: Two of the companies who build big chunks of the devices we use every day may be joining forces.

Broadcom, which builds Wi-Fi, Bluetooth, and wireless charging tech (among other things), just made a bid to buy Qualcomm, the San Diego-based chipmaker that provides wireless modems and processors for many of the world's top smartphones (including the iPhone).

The most interesting thing about this deal is the sheer scale of it: Broadcom is offering $105 billion for Qualcomm, which would make it the largest deal in the history of tech companies, larger than even Dell's purchase of EMC in 2015, which was valued at $67 billion. Taking into account $25 billion of Qualcomm debt, Broadcom values the deal at a staggering $130 billion total, which is about the market cap of IBM.

Qualcomm didn't solicit the bid, and, according to Reuters, the two companies didn't have any talks prior to Broadcom's announcement. Qualcomm says its board of directors is reviewing the hostile bid, which it will need to present its shareholders. They're expected to reject the deal since it undervalues the company, Bloomberg reported.

It's not a particularly great time to be Qualcomm. Although the company has a consistently strong presence in mobile -- particularly in the high end -- with its Snapdragon line of chips, the company has been mired with legal difficulties. Both companies and countries have accused Qualcomm of anti-competitive practices, chief among them Apple, which sued Qualcomm in a U.S. court earlier this year.

It's unclear what would happen to those ongoing legal issues if the deal were to go through. What is clear, though, is that if Broadcom were to add Qualcomm's industry might to its portfolio, it would have far and away the strongest chip presence in many smartphones, particularly the iPhone. An iFixit teardown of the iPhone X show Broadcom is supplying more components than ever to Apple's flagship product, including a touch controller and a wireless charging chip, for a total of eight.

Qualcomm famously provides the modem -- the part responsible for connecting to wireless networks (signified by the "LTE," "4G," and "3G" indicators on the status bar). However, Apple is anxious to diversify its modem suppliers in light of its lawsuit against Qualcomm, and uses Intel modems in some models. It's been rumored Apple will move to ditch Qualcomm altogether for its 2018 iPhones.

That clearly hasn't deterred Broadcom, who sees Qualcomm as a way to continue its slow and steady winning streak (the stock has increased in value more than 7x over the past five years). It appears that merely providing components is no longer enough for the tech giant; it wants the influence that Qualcomm enjoys, even if might mean getting sued from time to time.