
Broadcom's $2B warning rattles global chip sector - notlukesky
https://www.reuters.com/article/us-huawei-tech-usa-chipmakers-broadcom/broadcoms-2-billion-warning-rattles-global-chip-sector-idUSKCN1TF0O1
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Expez
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!

~~~
sologoub
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.

~~~
Theodores
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
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.

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DigitalTerminal
It shouldn't affected Micron as much considering it already has one of the
lower P/E ratios and P/B ratios in the industry. It seems like their declining
earnings and exposure to China should already be priced in. With that said it
will probably affect Micron just the same if not more considering Huawei made
up, I believe, 13% of their sales last year. The idea that this is all
happening in what was already a down cycle for the industry will cause people
to become fearful and impatient.

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kwanbix
What I don't understand is, if you are afraid of the Chinese government
somehow interfering with the building process, shouldn't they start building
everything in US?

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soup10
The trade war with China is reckless and damaging to the US chip industry.
This is a self-inflicted wound that should of been avoided.

~~~
theandrewbailey
Chinese protectionism and theft of IP can't be avoided. Self-inflicted wound?
Yes, but it's meant to make the chronic soreness go away.

~~~
supernovae
You do realize that China is now just going to develop its own CPUs, it's own
OS's and its own devices now and China will be better suited to sell to
emerging markets where the real growth is since US companies can't compete. I
also know the 3rd licensee of X86 will be benefiting from these trade wars
because their demand will be going up and they're not a US company.

~~~
natpalmer1776
Even if this entire comment thread were not a vast oversimplification of these
markets, why would this be such a bad thing? Two main points to this:

1\. The United States does not depend on manufacturing as the backbone to its'
economic stability.

2\. Emerging markets may use 'Chinese Technology' during periods of major
growth, but as those emerging markets mature they will likely require the
stability provided by the mature incumbents of the field*

* as long as those incumbents keep pace with the overall technological development.

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phkahler
>> The forecast, included in the company’s second-quarter results late on
Thursday, was the hardest evidence yet of the damage President Donald Trump’s
trade war with Beijing may do to the global industry.

To pin this on Trump is to overlook the larger picture. He seems to be putting
America first, as promised. Also, I dont think it's his idea alone.

~~~
chvid
Mr. Trump surrounds himself with people who has the explicitly stated goals
of:

1\. Preventing China growing further thus surpassing USA in economic might and
by extension military might.

2\. Regime change in China, the communist party's downfall from power and
possible breakup of mainland China.

They even have revived the cold war institution "Committee on the Present
Danger" whos public lectures and discussions can be found on youtube.

Secondly I think the anti-China sentiment in USA is so strong that mr. Trump
can be reelected on it.

For China this is a sputnik moment where they realize that for them to
continue growth beyond this critical point, they need to become completely
self-sufficient.

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mmmBacon
Of course the media present doom and gloom. But many of these companies have
diversified their business. Most companies mentioned in this article have
diversified their customer base and while there is some short term pain, most
will move past this. Longer term, I think we are creating a competitor in
China. I can’t imagine the Chinese government, seeing how vulnerable they are,
won’t invest heavily to produce internal competitors.

~~~
sverhagen
So you are saying that after the short term pain there will be... long term
pain (a strong competitor created)?

~~~
NotPaidToPost
The US government is not interested in the long term. The horizon is the 2020
election.

