Last week Broadcom Inc. Chief Financial Officer Thomas Krause told Wall Street analysts that the chipmaker is looking to make more acquisitions in the software market. That statement, it seems, described not a future goal but rather a plan already set in motion.

Bloomberg broke the news late Tuesday that Broadcom is holding talks to acquire cybersecurity giant Symantec Corp. According to the publication’s sources, the negotiations are in an advanced stage and could see an agreement signed within weeks. However, the insiders cautioned that the deal may still fall through.

A separate report in the Financial Times cited “people briefed about the negotiations” as saying Broadcom could pay more than $15 billion for Symantec. They said a deal may be announced as early as today, but echoed the view that the talks could still break down.

San Jose, California-based Broadcom makes chips that are used in most of everything from smartphones to data center equipment. The rising cost of developing new semiconductors, driven by the end of Moore’s Law, has driven the company to look to the software market for growth. Broadcom acquired CA Technologies Inc. for $19 billion last year as part of this effort.

Whereas CA is best known for its infrastructure management software and developer tools, Symantec’s name is most closely associated with antivirus products. The 37-year-old company ranks as the world’s largest maker of security software, with $4.71 billion in annual revenues as of its last fiscal year. It claims an installed base of 350,000 organizations and 50 million users.

Though Symantec and CA’s portfolios overlap only in a few areas, they have one key point in common: Both providers increasingly cater to companies with hybrid cloud environments. Symantec in particular has been beefing up its hybrid cloud features recently. In February, the company bought a security startup called Luminate Inc. that had developed a platform for securing user connections across on- and off-premises environments. 

In the Wall Street briefing last week, Krause said the chipmaker’s acquisition plans focus on hybrid cloud software.

Symantec’s shareholders have responded positively to the acquisition report, sending its stock spiking as much as 20% today. But Broadcom investors are taking a more cautious position. The chipmaker’s share price are down more than 4% at the time of writing, which echoes the stock price drop the company saw after announcing the CA deal last year.

“Broadcom is having an identity crisis right now,” said Patrick Moorhead, president and principal analyst at Moor Insights & Strategy. “It needs to figure out if it’s a chip company, software company or just an investment conglomerate. Right now it looks like an investment arm without connected value, only interested in buying undervalued assets, chopping them up and making a buck.”

Broadcom has been pursuing an aggressive mergers and acquisitions strategy under Chief Executive Hock Tan. The company was born from the blockbuster 2015 merger between chipmakers Avago Technologies Ltd. and Broadcom Corp., which was the largest-ever such transaction seen by the semiconductor industry. The combined entity went on to absorb a third semiconductor firm, Brocade Communications Inc., a year later.  

Not all of Tan’s strategic bets have worked out. Last year, the Trump administration quashed an attempt by Broadcom to conduct a hostile takeover of rival Qualcomm Inc., citing national security concerns. 

Photo: Symantec