Broadcom revenue grows 9% despite weak semiconductor business

Broadcom said its revenue rose 9 percent to $5.52 billion in the third quarter ended Aug. 4 from $5.06 billion in the same period last year.
BroadcomBroadcom generated revenue of $4.353 billion (–5 percent) from semiconductor solutions and $1.140 billion from infrastructure software business.

Broadcom said demand for microchips had hit a bottom and would remain at current levels, a sign that an industry downturn may linger.

Research firm Gartner forecasts 9.6 percent dip in semiconductor revenue to $429 billion in 2019. U.S.-China trade tensions, including tariffs on some products and the restrictions on sales to Huawei are pressuring chipmakers.

“There is not much clarity or visibility yet, or certainty that any sharp recovery is around the corner,” Broadcom CEO Hock Tan said.

Broadcom said networking performed well driven by demand for merchant switching and routing platforms. Broadcom said it also expected shipments of custom silicon solutions in AI, SmartNIC and video transcoding to cloud datacenters were strong.

The chipmaker also maintained its full-year 2019 revenue forecast of $22.50 billion, saying that although the U.S.-China trade conflict continues, it had not seen further deterioration in its business, both globally and in China.

Broadcom aims to achieve revenue of $17.5 billion from semiconductor solutions and $5 billion from infrastructure software.

Broadcom recently announced a $10.7 billion deal to buy Symantec’s enterprise security unit. Tan has propelled the chipmaker that was worth just a few billions to a market capitalization of about $118 billion in the period that he has been at the helm.

Broadcom earlier acquired software maker CA Technologies for $19 billion to diversify its revenue stream.

Broadcom could not buy rival Qualcomm as the United States federal government blocked the deal due to security concerns.