Wireless chipmaker Broadcom Corp said on Sunday that number-two cell phone maker Samsung Electronics Co Ltd was shipping next-generation handsets that use its chips to cellular operators.
The 3G phones, which can surf the Web and download data from the Internet faster than previous generations of phones, are on their way to operators in Europe, Asia, Africa, Australia and elsewhere, Broadcom said.
Number-one cell phone maker Nokia has said it would buy phone chips from STMicroelectronics, Broadcom and Infineon, potentially decreasing the clout of market leaders Qualcomm Inc and Texas Instruments Inc, Nokia's long-time supplier.
Investors saw those earlier deals as key wins for Broadcom and STMicro as business from the leading mobile phone maker could promise a big-enough increase in sales volume to help them shoulder the cost of competing in the cash-intensive chip industry.
The combined market share of those two companies (Nokia and Samsung) represents a significant market opportunity, said Yossi Cohen, who manages Broadcom's mobile platforms group.
Last year TI and Qualcomm each had about 20 percent of the mobile phone chip market, according to iSuppli. With a roughly 9 percent share, Freescale Semiconductor was next, but it is expected to lose market share as its main client, Motorola Inc, has also added TI and Qualcomm as suppliers.
Broadcom had a 1.4 percent market share in 2006 and STMicro had an almost 6 percent share.
The Broadcom chips that Samsung selected for its SGH-J750 and SGH-A401 3G phones include its BCM2133 EDGE baseband processor, the BCM2141 WCDMA co-processor, the BCM2045 Bluetooth transceiver and the BCM59001 power management unit.
Shares of Irvine, California-based Broadcom have risen 15 percent this year, compared with a 5.6 percent increase in the Philadelphia Semiconductor Index.
(Reporting by Duncan Martell)