He also said that long-term supply contracts such as the one with Apple give Broadcom "the confidence to invest in R&D to make [capital expenditure] capacity investment. And in return, we offer the best leading-edge technology in specific areas in a timely manner to our critical customers”.
Broadcom has been working to allocate the chips it can get to end market demand for electronics rather than to customer stockpiling, an effort analysts said seems to be working.
“While our industry checks do indicate significant double ordering in Broadcom's supply chain, we think Broadcom's customers are still unable to build much buffer inventory," said Kinngai Chan, an analyst at Summit Insights Group.