Broadcom forecasts upbeat product sales on 5G ramp up
05 June, 2021
Broadcom expects current-quarter earnings above Wall Street goals, as the semiconductor firm is set to take advantage of the rising adoption of 5G technology.
As the global rollout of 5G ramps up, strong demand for higher-priced chips found in smartphones will benefit Broadcom, which counts iPhone maker Apple as a significant customer in its wi-fi chip division.
The business, which also makes chips for info centres and servers, estimates third-quarter revenue to be about $6.8 billion, exceeding analysts' estimates of $6.6bn, according to Refinitiv.
The business's fiscal third-quarter estimates typically include ramping up production for the start of Apple's iPhones in the fall.
On a conference call with investors, leader Hock Tan said demand in the business's wireless segment was greater than anticipated in the just-finished fiscal second quarter, that could cause less demand in the fiscal third quarter.
He also said that long-term source contracts like the a single with Apple offer Broadcom "the self-confidence to purchase R&D to make [capital expenditure] capacity expense. And in return, we offer the very best leading-border technology in certain areas regularly to your critical customers”.
Broadcom has been working to allocate the chips it can get to end industry demand for electronics rather than to buyer stockpiling, an attempt analysts said seems to be working.
“While our sector checks do indicate significant double buying in Broadcom's source chain, we wonder Broadcom's customers remain unable to build many buffer inventory," explained Kinngai Chan, an analyst in Summit Insights Group.
Broadcom's revenue rose to $6.6bn in the next quarter ended May 2, from $5.7bn a year previous. Analysts had expected earnings of $6.5bn.
The company reported a net gain of $1.5bn found in the second quarter, weighed against $563 million a 12 months earlier.
On an adjusted basis, the business earned $6.6 per share, beating estimates of $6.4 per share, according to Refinitiv.
Source: www.thenationalnews.com
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