Broadcom CEO promises more Israeli acquisitions

CEO Scott McGregor says Broadcom has a completely different philosophy than Intel.

Broadcom CEO Scott McGregor _370 (photo credit: Israel Hadart )
Broadcom CEO Scott McGregor _370
(photo credit: Israel Hadart )
Fortune 500 company Broadcom intends to make more acquisitions of Israeli start-ups in the coming years, visiting president and CEO Scott McGregor said Tuesday.
“Our intention is to continue to buy companies in Israel,” he told reporters. “We have a very good track record here and have a favorable view of Israel as a place to acquire great technologies.”
Mcgregor refused to specify which firms were being targeted.
“We talk to almost all Israeli start-ups all the time, so I am not surprised that there are rumors,” he said.
With 2011 net revenue of $7.39 billion, Broadcom is the world’s 10th-largest vendor of semiconductors for wired and wireless communications and the second-largest vendor of fabless semiconductor suppliers. Fortune magazine ranked it number one for innovation among semiconductor companies last year.
The company has acquired nine Israeli firms in the past decade, including SC Square and Provigent in 2011 and Percellot and SightIC in 2010. It employs 500 Israelis, making this its second- largest base of operations outside the United States.
“We see Israel as a hotbed of innovation,” McGregor said. “The government and the Office of the Chief Scientist encourage start-ups here. There is encouragement of technology and encouragement of us – not so much in giving us money but through support of us establishing roots here.”
Although a large multinational corporation, Broadcom is more like a start-up in terms of its composition, he said. Ninety-five percent of the company’s Israeli employees and 76% of its employees worldwide are engineers, he said, adding: “You could open a university with all our PhDs.”
McGregor said Broadcom has a completely different philosophy than Intel, which is the world’s largest manufacturer of semiconductor chips and operates six R&D centers in Israel, led by its Fab 18 plant in Kiryat Gat.
“Intel is a quality company,” he said. “But I think Intel has a view that it is all about the processor. We believe that it is all about creating a complete system. We focus on creating a chip that integrates all the functions you need... We create set-top box chips. Intel creates processors that are good for set-top boxes.”
McGregor expressed confidence that Broadcom would continue its recent strong growth through capitalizing on opportunities in three markets: home devices such as television and computers, handheld devices such as smartphones and tablets, and infrastructure.
“We’re in the right markets,” he said, citing forecasts that by 2015, one million minutes of video content will cross Broadcom’s network every second, and the number of devices connected to IP networks will be double that of the global population.