Setting up possibly the biggest technology acquisition in history, Avago this morning announced a $37 billion deal to acquire Broadcom.

The deal involves $17 billion in cash and roughly $20 billion worth of Avago shares. It would also mark the end of an era in communications semiconductors, as Broadcom, once a rising star of the dot-com era, has been a kingpin of the industry and, in areas outside of microprocessors, a foil for Intel.

The combined company would have an estimated enterprise value of $77 billion, by Avago's count. The companies' combined revenues amount to roughly $15 billion per year.

This year has become open season for massive mergers. This deal is the chip analogue to the Nokia deal for Alcatel-Lucent — and it's more expensive, too, compared with the $16.6 billion Nokia is offering.

Elsewhere in the chip world, NXP Semiconductors is acquiring Freescale for $16.7 billion — $11.8 billion if you account for Freescale's debt.

Broadcom was already a giant in communications chips. The company might be best known for broadband and WiFi chips — cable modems were among its earliest markets — and it's also branched out to markets such as network processors and Ethernet switch chips. It's in switching where Broadcom intersects SDxCentral's world most strongly, as its chips are used in the majority of new switch designs, including most of the current wave of white box switches.

Avago began as a private equity spinout of Agilent Technologies, itself a spinout of HP. Its focus has been on what are called III-V semiconductors — chips based not on silicon, but on combinations of elements from the third and fifth groups of the periodic table (indium phosphide being one example). Its products include LEDs and, on the communications side, optical transceivers.

The Broadcom founders would continue to be involved with Avago after the acquisition: Henry Samueli as CTO and board member, and Henry T. Nicholas III as a strategic advisor. Broadcom would also claim one other seat on Avago's board.

Avago CEO Hock Tan would remain president and CEO of the combined company.

Broadcom shares, which climbed 21 percent yesterday on rumors of this deal, were down $1.09 (2%) at $56.06 in midmorning trading. Avago shares were up $1.43 (1%) at $142.92.