[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.

[ksec]

We already saw what s 5% Smartphone sales decline / missing target look like in 2018, with rapid price collapse in NAND and DRAM. Trade War wasn't really the main issue.

The Smartphone market has reached near saturation with 80%+ of adult in developed countries already owning a smartphone. There will be a long tail to reach 90%+. Replacement circle has also stretched to beyond 3 years. My 6s as a work usage mobile is doing great, if you don't game on it the only thing I could complain about is the Camera. ( I wish Apple still has an iPhones that is under $400, instead they keep pushing up the prices to increase ASP. ) And my 6s, when in use still feels way faster than many Phones being sold today. [1]

5% of 1.2B Smartphone is 60M Unit, and if we see another decline again this year, we are looking at 100M+ unit missing from the peak. That is going to have a widespread effect on the industry, especially when Apple, Samsung, and Huawei, each with 200M+ unit year ( Roughly 50% of the market )can invest into their own Silicon ( Such as Modem, SoC, Power, etc ), there will be a even smaller market for the rest of the players.

We have already seen peak Smartphone, and Winter is coming.

>We’ll see if the 2019 announcement season will be more exciting. I can bet it will be a boring year. Other than possibly the biggest leap in Camera quality since iPhone 6s to iPhone 7.

[1] https://pbs.twimg.com/media/D9D4o6qUcAA1DJd?format=png&name=...

[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.

[supernovae]

If emerging markets are where growth & recovery is at, the US certainly won't compete there through protectionism. This isolationist approach to trade is just that... You can't have many 20B+ dollar companies if they're the only market is the US and it's saturated and we simply don't have the manufacturing capability at their expected cost and margin

[Retric]

Having multi billion dollar companies is only so useful when significant portions of production, sales, and stock ownership is outside the US.

Protectionism is theoretically a bad idea, but GDP is not the only measure of economies. Being largely self sufficient for example has real strategic advantages. In that context low tariffs (sub 10%) are not always a bad idea.

[jiveturkey]

I think you're being far, far too critical. It's a "short form" article, "4 min read" which really means under 1 minute.

The headline is "rattles global chip sector" and they very quickly get to "8.6% drop" in share price.

It's quite clear, without knowing total revenue, that the $2B means quite a lot to Broadcom.

I wouldn't be surprised if they actually had the total revenue number in there and it got cut in editing. This isn't the economist, it's reuters.

[simonh]

Sure, but how big a percentage of Broadcom this is isn't the whole story. It's not just about the impact on Broadcom, but also the impact on the economy and communities. A loss of $2bn worth of orders would probably have a similar impact in terms of jobs for example regardless of how big Broadcom was, perhaps unless they went bust.