AT FIRST glance the chip business and the Serengeti appear to have little in common. But both are arenas where large predators hungrily stalk big game. On November 6th Broadcom announced its intention to buy its rival, Qualcomm, for around $130bn, including debt. If successful, it would be the largest deal in the history of the technology business (see table).

And like the African plains, the semiconductor industry supports a complex food chain with different species of chipmakers hunting each other. Qualcomm is already trying to swallow another chip firm, NXP, from the Netherlands, in a deal worth $47bn. In 2015 NXP, which makes chips for automobiles and other markets, itself completed a merger with Freescale, another large chip company. Meanwhile, Broadcom has become the world’s fifth-largest semiconductor firm by snapping up rivals. It has pulled off five big acquisitions since 2013 and is seeking approval for its $5.9bn bid for Brocade, yet another semiconductor company. If it successfully ingests Qualcomm, the combined group would become the world’s third-largest chipmaker, behind only Intel and Samsung Electronics, and a dominant supplier of many components in smartphones.

Consolidation in semiconductors is only speeding up, both in memory chips and, as with this proposed transaction, in microprocessors. Between 2006 and 2016 deals worth a total of $556bn were struck as chipmakers sought to expand in a rapidly maturing industry. Previous sources of brisk growth, such as the spread of personal computers, tablets and smartphones, have dried up. Global sales of chips reached $344bn in 2016, but in the past five years they have flattened.

It is against this backdrop that Hock Tan, chief executive of Broadcom, continues to hunt for new targets. His firm switched its name to Broadcom after the company he once ran, Avago, acquired it in 2015 for $37bn. This month he stood next to President Donald Trump as he announced that he would move Broadcom’s legal headquarters from Singapore to America, a move surely designed to encourage American regulators’ approval both for his acquisition of Brocade and the subsequent bid for Qualcomm.

Mr Tan and his firm keep a low profile and are barely known outside the semiconductor industry, but his techniques have a following. In particular, he has connections to America’s private-equity industry. Silver Lake, a prominent buy-out firm that owns a stake in Broadcom, is providing $5bn in financing for the proposed takeover, alongside banks.

Most semiconductor firms are run by electrical engineers who see engineering as the solution to their problems, says Mr Tan, who was born in Malaysia, studied engineering at the Massachusetts Institute of Technology and then business at Harvard Business School. He tackles his industry more like a private-equity boss, finding firms that are bloated and cutting costs. “He ran through Broadcom with a machete,” says Stacy Rasgon of Bernstein Research. According to Linley Gwennap of the Linley Group, a consultancy focused on semiconductors, Mr Tan eliminated an entire layer of management at Broadcom and now has around 20 business units reporting directly to him.

Scale helps semiconductor companies greatly because the business is so capital-intensive. Broadcom also sees benefits from Qualcomm’s investments in areas such as 5G technology, where it falls short itself. If Qualcomm’s purchase of NXP is approved, Mr Tan would also gain exposure to the automotive market and to self-driving cars, another area of promise for chipmakers.

Qualcomm has recently suffered legal wounds, which will have helped draw Broadcom in for a kill. It makes the majority of its revenue from patent licensing, but in January America’s consumer watchdog, the Federal Trade Commission, sued it, alleging it was abusing its monopoly position in order to extract high licensing fees for baseband chips, used in smartphones. Regulatory bodies in China, South Korea and Taiwan have levied hefty fines on Qualcomm for anticompetitive behaviour. One of the semiconductor industry’s most powerful customers, Apple, has also sued Qualcomm over its licensing terms, and iPhone manufacturers have started withholding royalty payments, depriving Qualcomm of billions in sales as the dispute rages on. There is no end in sight.

Mr Tan has suggested that new ownership could lead to a more amicable relationship between Qualcomm and customers such as Apple, although there is little evidence for that view. In a few areas, including connectivity chips that enable Wi-Fi and radio-frequency chips, Broadcom and Qualcomm compete; having a giant firm with more market power is not likely to please chip buyers. If they combined, with no divestments, Qualcomm and Broadcom would control between 50%-60% of the market for Wi-Fi chips and 27% of radio-frequency chips for mobile devices. According to Mr Gwennap, Broadcom has raised prices in some markets where it has a dominant share, such as Ethernet switches for data centres, and customers are unhappy.

Chip, chip, chip, chip hooray

Qualcomm’s board is said to be preparing to reject the offer, which it considers to be too low. Broadcom could raise its price to see through a deal, or pursue a hostile bid. But even if Broadcom wins the support of Qualcomm’s bosses and shareholders, there are large risks, says Geoff Blaber of CCS Insight, a research group. With Qualcomm’s pending purchase of NXP and Broadcom’s of Brocade, what looks at first glance like a merger between two giants is actually a four-sided deal. It would be difficult to unite so many different divisions and business units all at once.

A second risk is regulatory. The European Commission’s ongoing investigation of Qualcomm’s proposed acquisition of NXP is suggestive of the close scrutiny that another mega-deal in chips could receive in Europe, says Thomas Vinje, head of antitrust at Clifford Chance, a law firm, in Brussels. China’s antitrust regulators could also prove difficult. They may want to protect their own, home-grown chipmakers.

Some have interpreted the bid as an attempt by Broadcom to enter future fast-growing areas, such as chips for connected devices, collectively called the “internet of things”, and artificial intelligence, where Nvidia, another chipmaker, dominates. But the combined entity may actually be too focused on maturing semiconductor markets; by swallowing Qualcomm, Broadcom would be doubling down on smartphones rather than diversifying away from them.

Yet Mr Tan sees this as a good thing. “Focus is the key to success as the industry consolidates,” he says. “We try to progress innovation in areas we are already good at.” Perhaps he thinks that he can buy into new categories in the chip business when he is ready to roll them into his giant company. Skilled hunters learn never to reveal where they might be planning to attack next.