Chipmaker Broadcom Inc on Thursday gave a robust sales forecast for this quarter, allaying fears that spending on Internet infrastructure is slowing.
Revenue in the fiscal fourth quarter would be about US$8.9 billion, Broadcom said in a statement, compared with analysts’ average estimate of US$8.72 billion.
Share of Broadcom rose about 2 percent in late trading following the report.
The outlook suggests Broadcom is sidestepping a broader decline in chip demand, at least for now.
Other suppliers, including Nvidia Corp, Intel Corp and Micron Technology Inc, have predicted a steep sales slowdown — hurt by sluggish orders of personal computers and smartphones.
Given that pessimism, Broadcom CEO Hock Tan (陳福陽) acknowledged that his company’s report was “somewhat surreal.”
“From our vantage point, infrastructure spending is still very much holding,” Tan said on a conference call with analysts. “It’s true end demand.”
Broadcom’s backlog of orders, which cannot be canceled, is expanding and now sits at US$31 billion, Tan said.
The firm is rigorous in ensuring that those orders reflect demand for real products — and are not just going to be sitting in a warehouse.
Broadcom’s average lead time — the gap between getting an order and filling it — remains at 50 weeks, Tan said.
Broadcom is faring better than companies that focus on chips for PCs, which are not selling well, because consumers are coping with inflation and putting off big-ticket purchases.
Nvidia revealed an additional headache this week when it said that new restrictions on exporting to China could hurt sales.
Broadcom, which gets about 30 percent of its chip revenue from China, has not received a notice from the US government and does not expect to, Tan said.
The San Jose, California-based company sells a wide range of chips, making it a bellwether for the tech industry.
Its semiconductors provide short-range connectivity for many Apple Inc devices, including the iPhone. Other products are key to the networking machinery inside giant data centers owned by Amazon.com Inc’s AWS and Alphabet Inc’s Google.
Cisco Systems Inc uses those same chips in its products for corporate data centers, and a different range of Broadcom silicon runs many of the world’s set-top boxes.
Broadcom said demand from its large North American customer — its code for Apple — was solid and that it expects an increase in the current period when that company debuts a new range of models.
The chip supplier said that it expects unit volumes to be about the same as they were when the previous model was introduced.
In the third quarter, which ended on July 31, Broadcom’s profit rose to US$9.73 a share, excluding some items.
Revenue climbed to US$8.46 billion. Analysts had predicted a profit of US$9.57 a share on sales of US$8.41 billion.
Tan has predicted that the chip business would decelerate to historical growth rates of about 5 percent or less. That would be a major comedown from last year, when sales surged 26 percent.
Investors have already decided that the latest chip boom has run its course. As of Thursday, Broadcom had fallen 26 percent this year — in line with the Philadelphia Stock Exchange Semiconductor Index.
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