Chip business weakness curbs Broadcom growth

Chip business weakness curbs Broadcom growth

The company forecast third-quarter revenue of about US$5.75 billion

Broadcom on Thursday forecast current-quarter revenue, the midpoint of which was slightly below analysts' estimates as its chip business took a hit from supply chain disruptions caused by the novel coronavirus.

Chief Executive Officer Hock Tan, however, said the outlook for its chip business reflects a surge in demand from cloud, telecom and enterprise customers.

The company reported better-than-expected growth in quarterly revenue, supported by higher demand for chips used in data centres, which are ramping up as more people opt to work from home in the face of the coronavirus crisis.

Broadcom's second-quarter revenue rose 4 per cent to US$5.74 billion in the second quarter ended May 3, beating analysts' average estimate of US$5.69 billion (4.5 billion pounds).

The company forecast third-quarter revenue of about US$5.75 billion, plus or minus US$150 million. Analysts on average were expecting US$5.79 billion, according to IBES data from Refinitiv.

(Reporting by Ayanti Bera in Bengaluru; Editing by Anil D'Silva)

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