UPDATED 10:14 EDT / AUGUST 27 2012

Broadcom Reaches Out to Chinese and Other Booming Smartphone Markets

Broadcom is looking to expand its market in China, where the cost of smartphone manufacturing is low. The chip maker is looking to work with ZTE Corp. that manufactures handsets for a low price to gain market share in China along with up and coming markets from all over the world.

“Initially we were producing technology for China. Now they are producing for the world,” Chief Executive Scott McGregor said.

According to McGregor, Broadband is working on expanding its products so that they include chips compatible with China Mobile Ltd phones. Right now the chips the company currently manufactures are only compatible with China Unicom Ltd.

As of right now, Broadcom’s main customers are Samsung Electronics Co. from South Korea and Nokia Corp. from Finland. And according to analysts, the lower-priced Samsung phones are doing pretty well.

Speaking of Samsung, the company is investing $4 billion in their chip-making factory in Austin. This makes their total investments a whopping $13 billion since the company started operations in 1996. The money will go to upgrading their production line. The production of chips is said to begin during the second half of 2013.

Interestingly enough, only one of the company’s top ten customers—Huawei Technologies— is Chinese and only 10% of Broadcom’s chips are manufactured in China, so successfully expanding to the Chinese market may take some time.

Broadcom is not limited to only making chips for cell phones. They also make chips for all sorts of products, including television set top-boxes and network equipment.

According to McGregor, new entrants need to duplicate supply chains and that could cost billions of dollars. It will also take some time for the Chinese semiconductor industry to develop the technology to be successful.

“It will also take fortitude, investments and a bit of luck. It is possible, but it won’t come easy,” McGregor said.

Nothing worth waiting for comes easy, Mr. McGregor.

 

 


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