cens logo

Orders need six months of lead time: Broadcom

2020/04/20 | By CENS

Broadcom said: orders need six months of lead time
Broadcom said: orders need six months of lead time
Broadcom Inc, a chipmaker that supplies crucial components for Apple Inc's iPhones, told clients that disruptions to the global supply chain caused by the COVID-19 pandemic means that they would need to place orders for parts six months ahead of time.

Lockdowns in Malaysia, Thailand, Singapore and the Philippines are “closing or severely restricting business operations,” Broadcom vice president of sales Nilesh Mistry told clients in a letter dated April 13 and seen by reporters.

“Air and sea transport options have become unreliable and become more expensive, and have increased delays,” Mistry wrote.

The San Jose, California-based company declined to comment.

Broadcom is a critical part of the supply chain for products ranging from mobile phones to data center hardware.

Any delays in the delivery of its semiconductors could spread throughout that supply network, potentially leading to missed launches of some of the world's most high-profile and widely used electronic devices.

Wireless customers include Apple and Samsung Electronics Co, which use Broadcom chips to add Wi-Fi and other connectivity to some of the world's best-selling smartphones.

In networking, its switch chips are the market leaders, going into machinery that is used by all of the biggest equipment makers, including Cisco Systems Inc and Huawei Technologies Co (華為), as well as companies such as Amazon.com Inc that build their own gear.

“We hope that as the global community finds better methods to address the COVID-19 pandemic, the conditions will abate and we will be able to resume our normal operations,” Mistry said in the letter.

Broadcom is part of the same supply chain that most of the world's chipmakers use to outsource production, testing and packaging of their products.

Products from companies such as Qualcomm Inc, Nvidia Corp and Advanced Micro Devices Inc are built mostly by Taiwan Semiconductor Manufacturing Co (台積電), then tested and packaged by other companies in China and Southeast Asia.

Broadcom last week warned investors that it was experiencing some disruption to parts of its global supply chain.

In the “related risks” section of a regulatory filing, the company highlighted that a main warehouse and a number of assembly and test subcontractors are in Malaysia, which has shut down all nonessential businesses.

The warehouse is fully operational, but “many of the facilities of our suppliers and service providers are not,” the company said at the time.

“An extended closure of these facilities may require us to move assembly and test services to providers in other countries, and may, eventually, lead to a shortage of some components needed for our products,” Broadcom said.