Broadcom Limited (NASDAQ:AVGO) Q1 2019 Earnings Conference Call - Final Transcript

Mar 14, 2019 • 05:00 pm ET


Broadcom Limited (NASDAQ:AVGO) Q1 2019 Earnings Conference Call - Final Transcript


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Q & A

Thank you. (Operator Instructions) Our first question comes from Harlan Sur with JPMorgan.

Harlan Sur

Good afternoon, and congratulations on the solid quarterly execution. Hock, on the strong double-digits year-over-year momentum in your data center networking and compute acceleration segment, you've been shipping your new Tomahawk 3 switching platform now since the second half of last year. I think Google's using it for 200 gig, we hear Amazon is going to transition to 400, we're hearing good things from Baidu, Tencent and all of the cloud guys. Additionally, you're ramping compute acceleration ASICs into some of the big cloud guys as well. Question is, do you anticipate continued double-digit year-over-year growth for the full year here for the networking business as the pipeline here appears fairly strong?

Hock E. Tan

Very good question, Harlan. And now that listening to you, you really got me going. Yes, in networking and it's broader than just data centers, but let's start with data centers, Tomahawk 3, which is the 12.8 terabit, top of the rack switch, has just barely started production shipments. In fact, we do expect to -- we are fully expecting the ramp of Tomahawk 3 as part of the broader data center scale out with 400 gig pipes in the connect so to speak, to really start just about right now. In fact, our Q2 -- fiscal Q2 and progressing up to the rest of the end of the year as more and more on the names you mentioned in type of cloud jumping and expand and upgrade, I would say data centers simply because as you know, expanding the capacity of data centers and pipes is the simplest way to decongest -- to minimize or mitigate congestion control in this huge data centers in this large cloud guys.

So there is a broad refreshing and upgrading of data centers among these cloud guys. One area is mentioned Tomahawk 3 shipping, which is just starting this quarter in the significant volumes, was also not so perhaps obvious, but it's is very real for us is the fact that in order to run 400-gigabit per second throughput pipes, you need interconnect -- fiber optic interconnects that are build and dedicated in that area, that's a very high-tech products, which we are very deeply engaging and that brings the content by a multiple factors in this data center. And then as you expand the top of the rack switch, I can't resist saying, you need to connect data center to data center, what you called DCI inter-connectivity. And the approach that has been taken, which we are also very engaging with multiple OEMs while supporting the cloud base, is obviously coherent fiber optic connection at 400 gig and we believe we are very much in the lead on that area as well.

So these are product lines with product cycles we are seeing that are continuing the impetus of double-digit growth in networking. And it extends more than that. In routing, we are going to be launching and