Broadcom said the trade war has pretty much wiped out remaining hopes for a substantial rebound in the semiconductor market this year.
Tech conglomerate Broadcom Inc. pretty much wiped out remaining hopes for a substantial rebound in the semiconductor market this year, citing Thursday a combination of the sanctions on Huawei Technologies Co. and customers made jittery by trade concerns.
“In the second half, we had expected a recovery; however ... with respect to semiconductors, it is clear that the U.S.-China trade conflict, including the Huawei export ban, is creating economic and political uncertainty and reducing visibility for our global [original equipment manufacturer] customers,” Broadcom Chief Executive Hock Tan told analysts on a conference call.
Tan described skittish original equipment-maker customers afraid to place new orders in case they don’t use up their inventories, amid a backdrop of political uncertainty with no end in sight to the U.S.-China trade war. Analysts had predicted that the U.S. sanctions imposed on Chinese networking giant Huawei would hit Broadcom’s revenue, but the warning went well beyond that downfall.
“We see a very, very sharp and rapid contraction of supply chain and orders out there from our customers, especially of global OEM customers,” Tan admitted.
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