The third quarter of 2012 was a record-setter for fabless chip vendor Broadcom, which announced it reached total quarterly revenue of more than $2 billion for the first time, as well as another first-time milestone, mobile and wireless revenue above $1 billion.
Net revenue for the third quarter of 2012 was $2.13 billion, an increase of 8.7 percent above the $1.96 billion reported for the third quarter of 2011. Increased investments in research and development and higher manufacturing costs combined to bring down Broadcom's net income for 2012's third quarter , which slid to $220 million, down from net income of $270 million one year earlier.
"Despite a challenging economic environment, we're benefiting from multiple attractive secular themes, including increasing Wi-Fi attach rates, exponential growth in network traffic and strong adoption of high-definition cable and satellite solutions in emerging markets," said Scott McGregor, Broadcom's president and CEO, in a conference call with analysts following the quarterly report.
McGregor's comments were reported by EE Times, which noted the only other fabless semiconductor company to achieve $2 billion in sales in a single quarter is Broadcom rival Qualcomm (NASDAQ:QCOM). Qualcomm is scheduled to release its latest earnings report on Nov. 7.
Broadcom's chips are used in a wide array of products, including smartphones such as Apple's (NASDAQ:AAPL) new iPhone 5, wireless infrastructure, Wi-Fi routs, set-top boxes and more. The company claims 99.98 percent of all data traffic crosses a Broadcom chip at some point. In July, the vendor introduced its first 802.11ac chipset for use in smartphones, tablets, ultrabooks and related mobile devices, which should start hitting the market in the first quarter of 2013.
Broadcom's fourth-quarter guidance is not overly encouraging, however. The company predicted a decline in revenue due to challenging market conditions, including weakness in its infrastructure chip business which supplies chips for computer data center infrastructure and communications network equipment, said Reuters, noting other chipmakers such as Texas Instruments and Intel have suffered weak results due to the stuttering global economy.
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