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Really lazy reporting. We need the total to know how much $2B really matters to Broadcom. Putting the math on this here for everyone else: > Huawei accounted

by Expez 7y ago

Really lazy reporting. We need the total to know how much $2B really matters to Broadcom. Putting the math on this here for everyone else: > Huawei accounted for about $900 million, or 4%, of the company’s overall sales last year. Broadcom, however, also said the forecast cut “extends beyond one particular customer.” So total sales were 22.5B and a 2B hit is indeed pretty bad!

simonh 7y ago
Sure, but how big a percentage of Broadcom this is isn't the whole story. It's not just about the impact on Broadcom, but also the impact on the economy and communities. A loss of $2bn worth of orders would probably have a similar impact in terms of jobs for example regardless of how big Broadcom was, perhaps unless they went bust.
sologoub 7y ago
Not to mention this quote in the middle of the article: > The semiconductor industry has been grappling with slowing demand since the second half of 2018 with bellwether Texas Instruments warning in April that a cyclical downturn could last for another two years. > That has related chiefly to signs that mobile phone markets in some major economies are increasingly saturated while mass demand in new areas like self-driving cars and internet of things devices for homes and offices is still developing. So the $2B is not just the trade tensions (sure, these are not helping), but the overall saturation of the market for consumers. While the latest greatest phones are awesome, I personally haven’t felt the need to upgrade. When comparing say 3GS vs 4, that was a big leap and upgrade seemed warranted. We’ll see if the 2019 announcement season will be more exciting.
- ksec 7y ago
  We already saw what s 5% Smartphone sales decline / missing target look like in 2018, with rapid price collapse in NAND and DRAM. Trade War wasn't really the main issue. The Smartphone market has reached near saturation with 80%+ of adult in developed countries already owning a smartphone. There will be a long tail to reach 90%+. Replacement circle has also stretched to beyond 3 years. My 6s as a work usage mobile is doing great, if you don't game on it the only thing I could complain about is the Camera. ( I wish Apple still has an iPhones that is under $400, instead they keep pushing up the prices to increase ASP. ) And my 6s, when in use still feels way faster than many Phones being sold today. [1] 5% of 1.2B Smartphone is 60M Unit, and if we see another decline again this year, we are looking at 100M+ unit missing from the peak. That is going to have a widespread effect on the industry, especially when Apple, Samsung, and Huawei, each with 200M+ unit year ( Roughly 50% of the market )can invest into their own Silicon ( Such as Modem, SoC, Power, etc ), there will be a even smaller market for the rest of the players. We have already seen peak Smartphone, and Winter is coming. >We’ll see if the 2019 announcement season will be more exciting. I can bet it will be a boring year. Other than possibly the biggest leap in Camera quality since iPhone 6s to iPhone 7. [1] https://pbs.twimg.com/media/D9D4o6qUcAA1DJd?format=png&name=medium https://pbs.twimg.com/media/D9D4o6qUcAA1DJd?format=png&name=...
- Theodores 7y ago
  Has is in-car-entertainment stagnated too? Not so recently only the high end cars had a screen, nowadays every model in the range of every car manufacturer has a screen. So that growth has came to a standstill. Only if people suddenly start buying more cars more frequently can that sector grow. Given how slow the main marques are at releasing bona-fide EV cars I think it is a long time before self driving gets to be a thing. Even internet of things is not exactly something the world is desperate for. Maybe the party is over.
  - joncrane 7y ago
    Funny you mention that because co-habiting the front page of HN right now along with this thread is news that Madza is removing touch screens from its in-car systems. Tactile buttons are best when operating a machine that requires focus. Being able to reach for and feel a button, lever, or dial while focusing on driving is way safer than having to stare a a small screen to press the right area.
- supernovae 7y ago
  If emerging markets are where growth & recovery is at, the US certainly won't compete there through protectionism. This isolationist approach to trade is just that... You can't have many 20B+ dollar companies if they're the only market is the US and it's saturated and we simply don't have the manufacturing capability at their expected cost and margin
  - Retric 7y ago
    Having multi billion dollar companies is only so useful when significant portions of production, sales, and stock ownership is outside the US. Protectionism is theoretically a bad idea, but GDP is not the only measure of economies. Being largely self sufficient for example has real strategic advantages. In that context low tariffs (sub 10%) are not always a bad idea.
jiveturkey 7y ago
I think you're being far, far too critical. It's a "short form" article, "4 min read" which really means under 1 minute. The headline is "rattles global chip sector" and they very quickly get to "8.6% drop" in share price. It's quite clear, without knowing total revenue, that the $2B means quite a lot to Broadcom. I wouldn't be surprised if they actually had the total revenue number in there and it got cut in editing. This isn't the economist, it's reuters.

by Expez 7y ago

simonh 7y ago

Sure, but how big a percentage of Broadcom this is isn't the whole story. It's not just about the impact on Broadcom, but also the impact on the economy and communities. A loss of $2bn worth of orders would probably have a similar impact in terms of jobs for example regardless of how big Broadcom was, perhaps unless they went bust.

sologoub 7y ago

Not to mention this quote in the middle of the article: > The semiconductor industry has been grappling with slowing demand since the second half of 2018 with bellwether Texas Instruments warning in April that a cyclical downturn could last for another two years. > That has related chiefly to signs that mobile phone markets in some major economies are increasingly saturated while mass demand in new areas like self-driving cars and internet of things devices for homes and offices is still developing. So the $2B is not just the trade tensions (sure, these are not helping), but the overall saturation of the market for consumers. While the latest greatest phones are awesome, I personally haven’t felt the need to upgrade. When comparing say 3GS vs 4, that was a big leap and upgrade seemed warranted. We’ll see if the 2019 announcement season will be more exciting.

ksec 7y ago
We already saw what s 5% Smartphone sales decline / missing target look like in 2018, with rapid price collapse in NAND and DRAM. Trade War wasn't really the main issue. The Smartphone market has reached near saturation with 80%+ of adult in developed countries already owning a smartphone. There will be a long tail to reach 90%+. Replacement circle has also stretched to beyond 3 years. My 6s as a work usage mobile is doing great, if you don't game on it the only thing I could complain about is the Camera. ( I wish Apple still has an iPhones that is under $400, instead they keep pushing up the prices to increase ASP. ) And my 6s, when in use still feels way faster than many Phones being sold today. [1] 5% of 1.2B Smartphone is 60M Unit, and if we see another decline again this year, we are looking at 100M+ unit missing from the peak. That is going to have a widespread effect on the industry, especially when Apple, Samsung, and Huawei, each with 200M+ unit year ( Roughly 50% of the market )can invest into their own Silicon ( Such as Modem, SoC, Power, etc ), there will be a even smaller market for the rest of the players. We have already seen peak Smartphone, and Winter is coming. >We’ll see if the 2019 announcement season will be more exciting. I can bet it will be a boring year. Other than possibly the biggest leap in Camera quality since iPhone 6s to iPhone 7. [1] https://pbs.twimg.com/media/D9D4o6qUcAA1DJd?format=png&name=medium https://pbs.twimg.com/media/D9D4o6qUcAA1DJd?format=png&name=...
Theodores 7y ago
Has is in-car-entertainment stagnated too? Not so recently only the high end cars had a screen, nowadays every model in the range of every car manufacturer has a screen. So that growth has came to a standstill. Only if people suddenly start buying more cars more frequently can that sector grow. Given how slow the main marques are at releasing bona-fide EV cars I think it is a long time before self driving gets to be a thing. Even internet of things is not exactly something the world is desperate for. Maybe the party is over.
- joncrane 7y ago
  Funny you mention that because co-habiting the front page of HN right now along with this thread is news that Madza is removing touch screens from its in-car systems. Tactile buttons are best when operating a machine that requires focus. Being able to reach for and feel a button, lever, or dial while focusing on driving is way safer than having to stare a a small screen to press the right area.
supernovae 7y ago
If emerging markets are where growth & recovery is at, the US certainly won't compete there through protectionism. This isolationist approach to trade is just that... You can't have many 20B+ dollar companies if they're the only market is the US and it's saturated and we simply don't have the manufacturing capability at their expected cost and margin
- Retric 7y ago
  Having multi billion dollar companies is only so useful when significant portions of production, sales, and stock ownership is outside the US. Protectionism is theoretically a bad idea, but GDP is not the only measure of economies. Being largely self sufficient for example has real strategic advantages. In that context low tariffs (sub 10%) are not always a bad idea.

jiveturkey 7y ago

I think you're being far, far too critical. It's a "short form" article, "4 min read" which really means under 1 minute. The headline is "rattles global chip sector" and they very quickly get to "8.6% drop" in share price. It's quite clear, without knowing total revenue, that the $2B means quite a lot to Broadcom. I wouldn't be surprised if they actually had the total revenue number in there and it got cut in editing. This isn't the economist, it's reuters.