Broadcom Corp. (BRCM), a maker of communications chips, said it will explore strategic options for its cellular baseband business including a possible sale.
The company has hired JPMorgan Chase & Co. to assist, according to a statement today. A sale or wind-down of the cellular baseband business is expected to reduce GAAP research and development and selling, general and administrative expenses by $700 million.
Baseband chips are used to connect phones to cellular networks, a business dominated by Qualcomm Inc. Last year, Broadcom purchased assets from affiliates of Japan’s Renesas Electronics Corp. for about $164 million, aimed at speeding up its ability to offer that type of mobile-phone chip.
Shares of Broadcom rose 11 percent to $35.25 at 7:18 a.m. in New York. The stock had gained 7.5 percent this year through May 30.