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Before they were giants, federal S&T policy helped build Qualcomm and Broadcom
Citing national security concerns, the Trump administration made headlines this week when they ordered that chipmaker Broadcom stop pursuing its $117 billion bid for its largest competitor, Qualcomm. While the current role of the federal government has captured attention, it is worth noting the contributions of federal and higher ed technology commercialization policies– themselves innovative at the time – to both companies’ origins: Qualcomm’s roots trace back to an SBIR award, while Broadcom is the result of a UCLA spinoff and generous entrepreneurial leave granted by the institution.
When it first began in 1985, Qualcomm’s focus was providing research and development assistance to the federal government. Some of the first funding for Qualcomm came from Small Business Innovation Research (SBIR) awards at agencies such as the Department of Defense and the National Science Foundation. These funds helped Qualcomm hire engineers, develop chips, and ultimately, pivot from contract research to consumer applications.
Founded in 1991, Broadcom was developed by UCLA professor Henry Samueli and a student as a spinoff of university research. Broadcom leveraged its working relationships with the Department of Defense as an early developer of broadband communication technology before turning to industrial applications. The enactment of the Bayh Dole Act in 1980 allowed Samueli to retain the patent rights behind his research and university policies allowed him to work on the company while still employed at UCLA, where he has been on academic leave for nearly 25 years. Through its growth and global expansion, Broadcom has since moved its headquarters from California to Singapore.
US regulators have expressed concern that Broadcom’s takeover of Qualcomm would result in a dramatic reduction in R&D investment at Qualcomm, which in turn could hinder the competitiveness of the U.S. as China races to develop 5G network technologies.
More information on the histories of Qualcomm and Broadcom can be found in, “Public Universities and Regional Growth: Insights from the University of California,” a 2014 book by Martin Kenney and David Mowery.