Broadcom Inc, a chip supplier for Apple Inc and other big tech companies, rallied in premarket trading after predicting a boom in demand for its artificial intelligence (AI) chips.
Sales of AI products would gain 65 percent in the fiscal first quarter, far faster than its overall semiconductor growth of about 10 percent, the company said during a post-earnings conference call.
The chipmaker also predicted that the potential market for AI components it designs for data center operators would reach as high as US$90 billion by fiscal 2027.
Photo: Reuters
Like Nvidia Corp, Broadcom is positioning itself to be a major beneficiary of the AI spending frenzy. The company has won two major new hyperscale customers — the biggest operators of data centers, Broadcom chief executive officer Hock Tan said.
The stock rose as much as 15 percent in premarket trading on Friday before New York exchanges opened, putting the share price on track for an all-time high if the gain holds when regular trading begins. It had been up 62 percent this year to close at US$180.66.
Investors have piled into Broadcom’s stock this year, lured by AI optimism. The Palo Alto, California-based company had predicted that it would get more than US$10 billion in annual revenue from that market, outpacing other parts of its business. Ultimately, the number reached US$12.2 billion in the last fiscal year.
AI revenue grew 220 percent during the year, fueled by demand for processors and networking components, Tan said.
Demand for non-AI chips would be down in the first quarter, he said, adding that total sales would be US$14.6 billion in the period ending January, in line with estimates.
Tan has assembled one of the most valuable companies in the chip industry through a string of acquisitions. He has also built a software unit that is approaching the scale of its semiconductor operations. That has made the company’s forecasts a bellwether for a broad swath of the technology industry.
Profit was US$1.42 a share in the fourth quarter, excluding some items, the company said. Revenue rose to nearly US$14.1 billion in the period, which ended Nov. 3. Analysts had estimated US$1.39 a share in earnings and revenue of US$14.1 billion on average, according to data compiled by Bloomberg.
Data center providers rely on Broadcom’s custom-chip design and networking semiconductors to build their AI systems. The company also sells components for cars, smartphones and internet access gear. Its push into software, meanwhile, includes products for mainframe computers, cybersecurity and data center optimization.
Broadcom’s semiconductor division had revenue of US$8.23 billion in the fourth quarter, up 12 percent. Software sales grew nearly 200 percent to US$5.82 billion. The company is much larger than it was a year ago, partly because of its acquisition of VMware Inc, which it bought for roughly US$69 billion.
Prior to the report, analysts raised concerns that Broadcom’s chip-design business was suffering from weaker demand. They cited the slower introduction of a new version of a Broadcom processor for Alphabet Inc.
Apple is a top customer of Broadcom, which provides components for the iPhone. During earnings calls, Tan typically gives updates on Broadcom’s often-contentious relationship with that company, which he refers to as his “large North American customer.”
BYPASSING CHINA TARIFFS: In the first five months of this year, Foxconn sent US$4.4bn of iPhones to the US from India, compared with US$3.7bn in the whole of last year Nearly all the iPhones exported by Foxconn Technology Group (富士康科技集團) from India went to the US between March and last month, customs data showed, far above last year’s average of 50 percent and a clear sign of Apple Inc’s efforts to bypass high US tariffs imposed on China. The numbers, being reported by Reuters for the first time, show that Apple has realigned its India exports to almost exclusively serve the US market, when previously the devices were more widely distributed to nations including the Netherlands and the Czech Republic. During March to last month, Foxconn, known as Hon Hai Precision Industry
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and the University of Tokyo (UTokyo) yesterday announced the launch of the TSMC-UTokyo Lab to promote advanced semiconductor research, education and talent development. The lab is TSMC’s first laboratory collaboration with a university outside Taiwan, the company said in a statement. The lab would leverage “the extensive knowledge, experience, and creativity” of both institutions, the company said. It is located in the Asano Section of UTokyo’s Hongo, Tokyo, campus and would be managed by UTokyo faculty, guided by directors from UTokyo and TSMC, the company said. TSMC began working with UTokyo in 2019, resulting in 21 research projects,
Ashton Hall’s morning routine involves dunking his head in iced Saratoga Spring Water. For the company that sells the bottled water — Hall’s brand of choice for drinking, brushing his teeth and submerging himself — that is fantastic news. “We’re so thankful to this incredible fitness influencer called Ashton Hall,” Saratoga owner Primo Brands Corp’s CEO Robbert Rietbroek said on an earnings call after Hall’s morning routine video went viral. “He really helped put our brand on the map.” Primo Brands, which was not affiliated with Hall when he made his video, is among the increasing number of companies benefiting from influencer
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) yesterday expressed a downbeat view about the prospects of humanoid robots, given high manufacturing costs and a lack of target customers. Despite rising demand and high expectations for humanoid robots, high research-and-development costs and uncertain profitability remain major concerns, Lam told reporters following the company’s annual shareholders’ meeting in Taoyuan. “Since it seems a bit unworthy to use such high-cost robots to do household chores, I believe robots designed for specific purposes would be more valuable and present a better business opportunity,” Lam said Instead of investing in humanoid robots, Quanta has opted to invest
RSS