The figures came in better than expected, despite another terrible year in the US broadband market. While Broadcom’s 2002 performance will depend strongly on whether demand rises in its core markets, there may already be some signs of an upturn. Its new technological solutions should also prove helpful.
Broadcom has reported its results for Q4 and FY 2001.
Leading US communications chips maker Broadcom on Wednesday reported a narrower-than-expected Q4 operating loss and said demand was recovering. Q4 revenues reached $226.8 million, a 33% decrease from the previous year’s $340.2 million. The company’s total loss for 2001, excluding charges, was $28.8 million, or 11 cents a share. This performance was better than the widely predicted 12 cents a share loss.
The company has not escaped the effects of the downturn in the technology and telecoms markets, which cut demand for communications chips. The semiconductor industry is also suffering from serious overcapacity issues, and while uptake is likely to increase this year, it will take time before this feeds through to the chip manufacturers. Even so, Broadcom looks like it has now been through the worst.
Broadcom provides integrated silicon solutions that enable broadband digital transmission of voice, video, and data. In particular, it supplies components for cable set-top boxes, cable modems, and high-speed networks. Despite the slowdown, and the serious problems that hit the US broadband sector in 2000-01, the company’s core markets look set for growth this year. Broadcom also has some exciting new technology on the way – it expects its 12-port chip for the ADSL market to represent a significant opportunity for 2002.
While Broadcom is well positioned to take advantage of future growth opportunities, it is still in a troubled industry sector. Whether Broadcom returns to the black in 2002 will depend as much on the broadband market as on anything the company does itself.