What do the top 5 communication chip makers have in common?

Texas Instruments, Freescale, STMicroelectroncis, Broadcom and Qualcomm are the top 5 communication chip makers. And there are certain common ingredients in all of them.

1. They all cater to CPEs and end points. Since the cost per chip and the sheer volume of end user end-points is huge, that means better margins and bigger sales.

2. Majority of their chip product portfolio addresses broadband and/or wireless technologies. And both these markets are witnessing tremendous growth.

3. Third factor that makes these companies leaders is that they are able to offer solutions across the whole spectrum of higher end and lower end products. So they are not willing to let any opportunity slip away.

4. All these vendors spend at an average 15-20% of their revenues on R&D. Investing in R&D is the only way forward for maintaining differentiation.