Broadcom Corp. Chief Executive Scott McGregor told investors and analysts Wednesday that he plans to hold down expenses until the company sees a sustained surge in orders for its chips.
The company’s spending won’t increase even if demand picks up in the near term, Reuters quoted McGregor saying at a Bank of America-Merrill Lynch technology conference, since it would be hard to tell between a fleeting uptick and a longer-term turnaround.
McGregor also said Broadcom’s bid to grab a larger share of the market for mobile phone chips is unlikely to be profitable before 2011.
The company’s mobile phone chip push has raised some concerns among analysts.
Broadcom counts two top cell phone makers as customers, Samsung Group and Nokia Corp., but has just a small piece of the market, well behind Qualcomm Inc. and Texas Instruments Inc.
The company’s earliest agreements with Samsung and Nokia are set to bring in revenue for Broadcom toward the end of the year.
But the company’s most recent deals with the phone makers aren? expected to produce sales for years.
Shares of Broadcom were down about 3% at close of trading with a market value of $12 billion.
