Broadcom CEO Hock Tan warned the company’s fiscal 2020 revenue would be impacted by a major product cycle delay at a large North American mobile phone customer, fuelling speculation of delays to Apple’s next iPhone launch.
In a fiscal Q2 earnings call (the period ending 3 May), Tan said he expected Broadcom’s annual bump in revenue to come one quarter later than usual in 2020.
“In Q3, we will normally expect to see a double-digit sequential uplift in revenue from the ramp of next-generation phone at our large North American mobile phone customer,” he explained. “However, this year, we do not expect to see to see this uptick in revenue until our fourth fiscal quarter.”
Bloomberg noted Tan often refers to Apple as its “North American mobile phone customer”.
His comments marry with a report by The Wall Street Journal in April predicting Apple would delay mass production of new iPhone models due to the impact of the Covid-19 (coronavirus) pandemic, in-turn pushing back its traditional September launch.
Broadcom cemented its relationship with Apple at the start of the year, sealing two new multi-year component supply agreements. These build on a previous deal signed in 2019, with all three estimated to generate $15 billion in revenue for the chip company.
Tan noted while a delay in revenue growth was expected, nothing had changed in terms of what it was planning to supply to its mobile phone customers, including an increase in 5G components.
For its fiscal Q2, Broadcom reported revenue of $5.7 billion, up 4 per cent year-on-year, while net income slipped from $691 million to $563 million.
The company reported a limited impact from Covid-19 during the quarter, but Tan warned a surge in demand for semiconductors in fiscal Q3 would be offset by “an expected substantial reset in wireless”.Subscribe to our daily newsletter Back