Broadcom warns of weak demand for smart machine parts, launch or delay of new iPhone

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 Broadcom warns of weak demand for smart machine parts, launch or delay of new iPhone


Broadcom produces chips that filter radio signals from iPhones and other smartphones. The demand for mobile phones has declined as most of the worlds population is currently confined to their homes due to the outbreak of the new crown. Broadcom is also a major supplier of switch chips, which are mainly used to manage data flow in network equipment.

Looking forward to the future, our third quarter forecast for semiconductors shows that demand from cloud computing, telecommunications and corporate customers will surge, but this will be offset by supply chain constraints and a significant expected reset in the wireless sector, said Chen Fuyang, CEO of Broadcom, in a statement

Three months ago, the company withdrew its annual sales forecast on the grounds of the new crown outbreak and gave weak near-term guidance. Chen Fuyang said in March that Broadcoms supply chain was not affected by the blocking measures. Then in April, the company told customers to place orders at least six months in advance, thanks to local asylum rules in Malaysia, Thailand, Singapore and the Philippines.

Broadcom is one of the largest chip manufacturers in the world. It has expanded its business to the field of large computers and security software. Chen Fuyang restructured the company through a series of acquisitions, making its products play a role in everything from powerful data center network devices to smart phones.

The biggest bright spot in Bertones second quarter results was an increase in spending on data center equipment by large cloud computing providers. They have invested heavily in increasing capacity to cope with the extra traffic that comes with working from home.

Broadcom announced a 4% increase in net income in the second quarter to $5.74 billion. Earnings per share were $5.14 before certain items were deducted. In the third quarter, revenue is expected to be $5.75 billion, less than the average analyst forecast of $5.77 billion.

At the same time, Broadcom said the latest iPhone this year will be released later than in previous years. In a financial report conference call with analysts, Chen Fuyang said that a large mobile phone customer in North America has a major product cycle delay problem. He said the delay would mean a quarter later than in previous years. As a result, he expects wireless revenue to decline month on month in the third quarter of this year.

According to previous media reports, Apple plans to release a new iPhone a few weeks later than in previous years. The company usually launches its flagship phones in the second half of September, but occasionally it launches new models later, just like the iPhone X of 2017. This years delay in the launch of the new iPhone was mainly affected by the new crown epidemic, which slowed Apple engineers travel to China to verify devices and required employees to work at home for most of the first few months of 2020.

Broadcom is one of the latest companies in the technology industry to release financial statements. As the economy has been hit hard during the outbreak, the company is putting forward the latest demand view. Broadcom shares fell 1% in after hours trading. Earlier, the shares closed at $308.89 in New York. (small)

Source: Wang Fengzhi, editor in charge of Netease Technology Report_ NT2541