Semiconductor giant Qualcomm has rejected the $103 billion unsolicited merger bid from fellow chip maker Broadcom.

Qualcomm's board unanimously rejected the $70-per-share bid which CEO Paul Jacobs said "significantly undervalues" his company's position and growth prospects. 

Singapore-based Broadcom made the offer last week in what would have consolidated two major players in the booming sector fueled by growth in smartphones and other connected devices.

This move has set the stage for one of the biggest-ever takeover battles. 

The sources said Broadcom was preparing to submit a slate of directors by Qualcomm's December 8 nomination deadline. 

That would allow Qualcomm shareholders to vote to replace the company's board and force it to engage with Broadcom. 

Broadcom has also been deliberating the possibility of raising its bid for Qualcomm, including through more debt financing, some of the sources said, although it was not clear when Broadcom would choose to make such a move. 

The sources asked not to be identified because the deliberations are confidential. 

Qualcomm provides chips to carrier networks to deliver broadband and mobile data. It is engaged in a patent infringement dispute with Apple, and is also trying to close its $38 billion acquisition of automotive chipmaker NXP Semiconductors after signing a deal in October 2016. 

Broadcom has indicated it is willing to acquire Qualcomm irrespective of whether it closes the NXP deal.