Key component supplier Broadcom: customers need to place orders half a year in advance

20 Apr 2020

According to Bloomberg News, as the new crown epidemic continues to heat up globally, Broadcom ’s business operations are being affected by blockade measures including Malaysia, Thailand, Singapore and the Philippines. Broadcom also warned customers that they must place orders at least 6 months in advance. The extended delivery time indicates that the global supply chain is experiencing major problems. The An email sent to customers by Broadcom ’s vice president of sales, Nilesh Mistry, stated that the blockade measures in Malaysia, Thailand, Singapore and the Philippines are severely restricting or even shutting down Broadcom ’s business operations. These blockage measures will be originally 60 days to 90 days. The normal delivery time is extended to at least 180 days, Mistry recommends that customers place orders at least 26 weeks in advance. The extremely long delivery cycle shows that the epidemic has damaged the chip industry's global supply chain more than expected.

It is understood that Broadcom is one of the key parts suppliers of Apple and Samsung mobile phones. As China ’s economy recovers, the blockade and isolation of key regions such as Southeast Asia have had an unknown impact on the supply of various products from Nintendo game consoles to smartphones, and this email from Broadcom ’s vice president has added to the industry ’s The epidemic concerns about semiconductor supply. Mistry said in the letter that air and sea transportation have become unreliable, and that delays have also increased while being more expensive. But he did not disclose which products' delivery time has been extended, and how long Broadcom normally takes between order acceptance and delivery. According to reports, the delayed delivery of Broadcom ’s semiconductor products means that other semiconductor manufacturers may also face the same crisis, and delays in the delivery of semiconductor products may spread to the entire supply network, and some mainstream electronic devices in the market, including mobile phones and switches, may be delayed. After the release. As part of the bond issuance last week, Broadcom warned investors that some parts of its global supply chain have been disrupted. In the "Related Risks" section of a regulatory document, the company emphasized that Malaysia has a main warehouse and some assembly and testing subcontractors, and has closed all non-essential businesses. The company said at the time that the warehouse had been fully operational, but many facilities of its suppliers and service providers had not yet been operational. Broadcom said: "The long-term closure of these factories may require us to transfer packaging and testing services to suppliers in other countries, and may lead to a shortage of some components required for our products. If Malaysia strengthens restrictions, our warehouse will be Closed, or need to operate at a lower capacity, our ability to deliver products to customers will be severely limited. " Some industry pointed out that the extended delivery period of Broadcom may induce the phenomenon of rising prices and speculation in the spot market in the future, and spot merchants holding a certain depth of inventory will benefit in the short term, but in view of the fact that most terminals They will purchase a certain amount of consumption according to the regulations, so in the short term, there will be no "robbing goods" in the spot market.