Running Header: BROADCOM CORPORATION

Company Analysis

Company Analysis

Introduction

The company selected for this paper is Broadcom Corporation, which is a leading manufacturer of integrated circuits for broadband communications. This paper aims to discuss its industry's in depth analysis, which is Semiconductor industry in the Broadcom case. Further, the paper will address the overview of Broadcom with details of its strengths, weakness, opportunities and threats.

Discussion

Semi Conductor industry

While the economy is experiencing a slowdown in overall sector, company's semiconductors suffer greatly from this downturn.  Growth prospects of the majority of stakeholders are lowered and the recent announcements and publications both in the U.S. and Europe are proof. 

While the global market for chips expected an increase of about 3% in 2012, a study (IHS iSuppli) just say the opposite sector expects a decline of 0.1%. A study conducted by IHS suggests that the semiconductor market will decline by 0.1% over the whole of 2012. Reason: weakening of economic conditions that degrade the application of computers and related electronic components made. In the previous study the organization expected a positive development in the sector this year, about 3%. If this trend is confirmed, it will be the first time since 2009 that the semiconductor market will experience a decline, although it should rather speak of stagnation, as envisaged trend seems low.

To get the numbers up, IHS says that the PC market should be stronger. But it is expected to grow by 0.9% this year, according to IDC, hampered by weak demand in Asia and the Pacific and the crisis in Europe and the United States. IHS thought at first that gloom would be absorbed by the excellent form of the smartphone industry and its 42% annual growth in the second quarter, and projected growth of 3% of the semiconductor industry.  Sales are expected to rise again in 2013 according to IHS, which provides even a rebound by 9%, unless "the economic conditions do not improve."

External Analysis: Porters 5 Forces of Semiconductor Industry

Bargaining power of suppliers

The semiconductor market has the choice of suppliers for the chip manufacturers. The bargaining power of the suppliers is low because the market has a high number of suppliers and only a small number of players so companies can easily apply pricing pressures on their suppliers as they have a number of supplier's options.

Bargaining power of buyers

Buyers possess an advantage in purchasing as they purchase in large volumes and secondly the products are not sold to individual consumers. Chips are sold to Original Design Manufacturers (ODMs) and original equipment manufacturers (OEMs) and which comprise a strong buyer influence. Hence, the bargaining power of buyers in the semiconductor market is medium to high.

Substitute products

At this point in time, there are no immediate substitutes for semiconductor chips; therefore, current substitution is extremely low. In spite of this, there is the potential for new substances that may replace silicon chips in the future, given that its capabilities can be harvested and refined. One such substance is grapheme.

Inter-industry rivalry

The company competes with a number of major international and domestic suppliers. Some of the company's major competitors include ...