Chipmaker Broadcom to move headquarters to US from Singapore

Broadcom's Asia operations headquarters office at an industrial park in Singapore.
Broadcom's Asia operations headquarters office at an industrial park in Singapore.PHOTO: REUTERS

Singapore-headquartered American chipmaker Broadcom is relocating its legal home address to the United States - a move it believes will enhance shareholder value.

Changing Broadcom's parent from a Singapore company to a US corporation is expected to bring US$20 billion (S$27.2 billion) in revenue back to the US, said President Donald Trump, who made the announcement on Thursday at a White House press conference.

Broadcom chief executive Tan Hock Eng, who also attended the briefing, said a tax reform proposal put forward by the Republicans will make the US a friendlier place for business. "We believe the US presents the best place for Broadcom to create shareholder value," Mr Tan said in a statement.

"We expect the tax reform plan effectively to level the playing field for large multinational corporations headquartered in the United States and to allow us to go all in on US re-domiciliation." However, the move will take place regardless of whether the Republican plan passes, the company said.

The re-domiciling, which has to be approved by shareholders, will reportedly also facilitate Broadcom's US$5.9 billion takeover of US network provider Brocade Communications Systems. The deal, announced last November, has been delayed as a result of scrutiny by the Committee on Foreign Investment in the US, which reviews the national security implications of foreign investments in US firms.

Becoming a US-based company might help Broadcom avoid these regulations and push the deal through. Broadcom's website lists San Jose, California, as its existing corporate co-headquarters alongside Singapore.

The Nasdaq-listed Fortune 500 company was acquired by Singapore-based Avago Technologies in a US$37 billion mega-deal last year. The combined company became the third-largest US semiconductor maker by revenue, behind Intel and Qualcomm. Broadcom - a major supplier to Apple - logged US$13.2 billion in revenue globally for the year ended Oct 30 last year.

Its presence in Singapore includes its corporate co-headquarters in Yishun as well as facilities in Depot Road and North Coast Drive, according to the company's website. Broadcom had some 15,700 employees worldwide as of last October - about 40 per cent in Asia and 1,000 in Singapore, the company's annual report last year said.

Responding to the move, the Economic Development Board's director for electronics Pee Beng Kong said Broadcom's leadership team has always been based in the US.

"It has good business reasons to relocate its legal headquarters back to the US and we fully appreciate that. We understand that Broadcom's operations in Singapore, which include manufacturing and R&D, will remain unchanged and will not be affected by this move."

Re-domiciliation is an "expensive and complex process to implement", which means companies do not make the decision lightly, said PwC Singapore strategy leader Richard Skinner."With re-domiciliation, many associated headquarter functions such as management, finance and HR are likely to be moved. This would also likely mean a reduction in revenues and profits recognised in the original country."

A version of this article appeared in the print edition of The Straits Times on November 04, 2017, with the headline 'Chipmaker Broadcom to move headquarters to US from S'pore'. Print Edition | Subscribe