* Expectations for Europe already lowered
* Says demand should stay strong in parts of Europe
* CEO points to risk that crisis could spread
By Noel Randewich and Poornima Gupta
SAN FRANCISCO, Dec 6 Chipmaker Broadcom's chief executive downplayed the risk to tech sales from
Europe's debt crisis, saying expectations have already been
lowered and that demand would stay strong in the long term.
Spending on consumer electronics and other technology has
languished in recent months and experts fear that Europe's debt
crisis could spread to the United States and Asia and cripple
already-struggling economies around the world.
"To the extent it would have an impact on (the United
States and Asia) it matters. But remember, expectations are
already fairly low," Broadcom Chief Executive Officer Scott
McGregor said of the debt crisis. "I think a lot of the concern
of Europe is already factored into people's plans."
Broadcom, which makes chips used in cellphones and
networking equipment, has already warned that its sales would
fall as much as 13 percent in the current quarter compared to
the previous quarter due to weak demand in Europe and the
Sales of smartphones and tablets have been a relative
bright spot among consumer products but even those are showing
some signs of softness.
Taiwan's HTC Corp saw its sales fall 30 percent
in November from a month before as the world's No. 4 smartphone
brand struggled to compete against bigger rivals Apple
and Samsung Electronics .
Major Broadcom customers in Europe like Nokia
and Alcatel sell a big chunk of their products in
the United States and Asia, making them less sensitive to low
European demand, McGregor said.
He also said he expects demand to remain healthy in
European countries not struggling with fiscal troubles.
"At the end of the day, I think there will still be a lot
of consumer demand in Europe and a lot of healthy economies in
many of those countries," he said.
Worries about slow demand have pushed many manufacturers in
recent months to reduce high inventories of chips supplied by
Broadcom and its competitors.
In a sign that confidence is evaporating at factories and
businesses across Europe, investment there was flat in the
third quarter for the second quarter running and companies sold
McGregor declined to say when he expects Broadcom's
customers to stop trimming their stocks of microchips.
French chipmaker STMicroelectronics has said it
expects to return to normal business conditions in the second
quarter of 2012 after inventory is cleared.