The China government, which has set up a number of development funds to promote the IC industry, reportedly plans to take over Broadcom's handset solution business, according to industry sources.

Qualcomm, MediaTek and Intel are unlikely to compete to acquire the handset solution business unit since Broadcom's product lines are not complementary to the three individual companies, and the acquisition would only marginally boost their market share, said the sources.

However, Broadcom's handset solution business unit, which boasts a strong portfolio 3G and 4G chips as well as modem IP, will be instrumental to handset vendors which are planning to build up in-house own chipset solution platforms, the sources added.

The acquisition of Broadcom's handset solution business unit by the China government would enhance the semiconductor supply chain as well as the self-sufficiency rate of ICs in China, the sources commented.