Broadcom Analysis

Overview

Broadcom Corporation is a major technology innovator and global leader in semiconductors for wired and wireless communications. Their system-on-a-chip (SoC) and software solutions enable the delivery of voice, video, data and rich multimedia content to mobile devices, consumer electronics (CE) devices in the home and business networking products for the workplace, data centers, service providers and carriers. Broadcom provide the industry’s broadest portfolio of cutting-edge SoC solutions to manufacturers of computing and networking equipment, CE and broadband access products, and mobile devices.

Net Revenue. Product revenue consists principally of sales of semiconductor devices and, to a lesser

extent, software licenses and royalties, development, support and maintenance agreements, data services and cancellation fees. The majority of product sales occur through the efforts of our direct sales force. The remaining balance of product sales occurs through distributors. Licensing revenue and income from the Qualcomm Agreement is generated from the licensing of intellectual property.

We sell our products to leading wired and wireless communications manufacturers in each of our reportable

segments: Broadband Communications, Enterprise Networking and Mobile & Wireless

The following table presents details of total net revenue:

2009 2008 2007

Year Ended December 31,

Product revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95.2% 96.3% 99.0%

Income from Qualcomm Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8 — —

Licensing revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0 3.7 1.0

Total net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% 100.0% 100.0%

In addition, the vast majority of the licensing revenues and related income...