Broadcom is factoring in a later "significant uplift" in wireless chip sales than is seasonal due to a certain phone vendor delaying the launch of their next-gen blower – ie Apple's new iPhone isn't being released in September like it usually is.
Or so hinted CEO Hock Tan – he didn't name Apple – as he outlined Broadcom's Q3 financials for fiscal '20 ended 3 August, in which wireless semiconductor revenue slid 4 per cent quarter-on-quarter to $4.219bn, during a conference call with Wall Street types.
Tan said this was "due to the expected typical brand being pushed out this year. This is expected to result in a significant uplift however in wireless revenue of approximately 50 per cent sequentially in Q4."
According to Bloomberg, Apple will start shipping the latest iPhone models a "few weeks later" than last year's 20 September launch date due to the disruption caused by coronavirus, with a domino effect on component suppliers, including Broadcom.
Sales to Apple generated about 20 per cent of Broadcom's annual turnover in the previous financial year. The company only signed a $15bn contract in January to supply wireless components to Apple until 2023.
Tan added: "Despite this significant sequential ramp and a significant increase in our RF content, we expect revenue to be roughly flat year-on-year in Q4. Now, this is due to fewer units of our parts for the next-generation phone being shipped in the fourth quarter this year, relative to last year, due to this product delay.
"We currently expect Q1 revenue in wireless to be up sequentially from Q4 with an increase in expected unit shipments of our parts for the next generation phone compared to Q1 last year. In other words, the launch ramp this year is expected to complete only in Q1 whereas it has normally been completed in Q4 of previous years."
Apple declined to comment.
For its Q3, Broadcom turned over $5.821bn in group sales, up 6 per cent year-on-year. This was driven by a 41 per cent hike in software revenues to $1.602bn, more than offsetting the decline in semiconductors. Broadcom bought CA in 2018 and Symantec's enterprise biz last summer. Brocade was also bought by Broadcom in 2016 for $5.5bn.
Broadcom networking was up 9 per cent sequentially, broadband – next-generation cable modems – was up on the prior quarter, and server storage connectivity was up 10 per cent sequentially. No dollars values were given.
Tan said the business was starting to ramp Tomahawk 3 and Trident 3 switch products on the back of demand from cloud clients; telcos were integrating its Jericho 2 in edge and core networks; and orders were building from telcos for its Wi-Fi 6 access gateways.
The "more pressing problem" facing Broadcom, said Martin Courtney, analyst at TechMarketView, is how it pulls together the disparate entities into "one cohesive unit to maximise cross selling opportunities."
Broadcom reported a pre-tax profit of $688m versus $718m in the year ago period, partially because a tax benefit from last year was down by almost 44 per cent. ®