Last week WSJ reported Broadcom is putting their RFFE (radio frequency front end) business for sale. For those not familiar with Broadcom, the RFFE unit was Broadcom’s crown jewel among their 19 franchise businesses, and what Broadcom is known for. Selling the business is like Apple selling its iPhone business.

Broadcom’s CEO Hock Tan has a reputation in the industry to be a ruthless but savvy operator in terms of acquisition and divestiture. He built the current Broadcom over the past 10 years through a series of well-executed acquisitions and divestitures, with an almost impeccable track record. However this latest move made us scratch our heads and wonder, what is it that Hock is seeing and we are not?

We spent the past week talking to our industry sources and other investors, most of our conversations ended with a familiar name, Broadcom’s long-time nemesis, Qualcomm.

• We’ve written about Qualcomm’s push into the RF space multiple times in the past couple of months, here and here, for example.

• Our focus at the time was how Qualcomm was able to leverage its leadership in modem to help take the RF venture off the ground and get into almost all the first wave of 5G smartphones. The assumption was that Qualcomm’s RF unit was still in its very early stage, and whatever strength QCOM has is mostly coming from the modem side.

• It appears that we have underestimated the importance of integrating both digital (modem) and the analog (RF) part for 5G devices. Qualcomm is the only company that can provide a “modem to antenna solution” including digital baseband, Wifi, Bluetooth and all the analog RF component. Furthermore, Qualcomm recently announced their “5G Modular Platform” on their Snapdragon Summit, promising a cost and performance-optimized, and fast time-to-market solution for handset OEMs.

• This approach, if successful, will put a lot more pressure on its chipset competitors like MediaTek, Huawei, and Apple that do not have strong RF capabilities, and the RF specialist like Broadcom, Qorvo, and Skyworks that don't offer digital chipset.

• Could it be that Broadcom is now finding itself less competitive in the RF market with the rise of Qualcomm? If that’s the case, could MediaTek, Huawei and Apple be the most natural buyer for Broadcom’s RF unit?

Of course, this is just one theory and we could be totally off target. But if we were right, it is a good testament for Qualcomm’s RF effort and makes it very clear why Broadcom tried so hard to acquire Qualcomm two years ago (we were cheering for the deal back then). Broadcom even re-domiciled back to the US for the Qualcomm acquisition to avoid any CFIUS review. Ironically, they are now subject to CFIUS review for selling the RF business when some of the most likely buyers are based in Asia.