UPDATE 2-Broadcom drops Emulex takeover bid

* Broadcom is ceasing all Emulex buyout efforts

* Emulex rejects Broadcom's sweetened offer

* Emulex puts Q4 guidance at high end of range

* Emulex shares fall 13 percent, Broadcom rises 3 pct

(Adds Broadcom comment, analyst comment, background, share price)

NEW YORK, July 9 (Reuters) - Chipmaker Broadcom Corp (BRCM.O) withdrew its recently sweetened $912-million bid for Emulex Corp (ELX.N) on Thursday after the storage technology company rejected the bid as too low.

Shares in Emulex fell 13 percent after it announced the rejection on Thursday, while Broadcom share rose nearly 3 percent after it dropped its bid, which was originally intended to expand the chipmaker's position in a growing market.

Last week, Broadcom had raised its cash bid to $11 a share from $9.25 per share and dropped its hostile consent solicitation and a lawsuit against Emulex, in what it called a final effort to buy Emulex.

But after the rejection, Broadcom said it would turn its attention to enterprise networking technology. Analysts have said that Broadcom could buy a different company, such as QLogic Corp (QLGC.O), if its bid for Emulex fails.

Pacific Crest Securities analyst Brent Bracelin said the decision was disappointing for Emulex shareholders, which had previously driven the company's shares up in hopes of a deal.

"This final rejection puts the final nail on the coffin," Bracelin said. "Shareholders were hoping for a buyout offer. I would have liked the board to engage and negotiate with Broadcom. It did not look like that happened."

Bracelin said that without a buyout offer Emulex shares could fall to between $6 and $8, if its valuation falls back in line with those of rivals such as QLogic.

Emulex shares were down $1.30 at $8.40 on New York Stock Exchange, where Broadcom shares rose 63 cents to $23.98.

Emulex strengthened its estimate for its fiscal fourth quarter that ended June 28 and said it recently won four new design contracts on top of 12 wins announced in May, which it said validates its earnings and revenue projections for 2012.

"We unanimously believe Emulex will deliver significantly more value than Broadcom's revised offer through the company's rapidly developing converged networking business and solid execution in our host server and embedded storage markets," Emulex Executive Chairman Paul Folino said in a statement.

New design contracts have been central to Emulex's arguments that Broadcom's bid is too low.