Stock Profile: Broadcom Inc.

We may not often stop to consider the components of the devices that have become integral to our daily lives, but behind every screen are meticulously developed technologies. Among these inner workings are the diverse array of analog semiconductor devices developed by Broadcom (AVGO). Broadcom stands out as a key player in the semiconductor industry, delivering a broad range of semiconductor devices and infrastructure software utilized by everything from smartphones, data centers, and factory automation to telecommunications equipment and alternative energy systems. 

With strengths in developing both chips and software, Broadcom is significantly benefiting from the surge in AI infrastructure.

Broadcom’s business practices include efforts dedicated to environmental responsibility, workforce empowerment, and community investment.

Current Snapshot: A Market Leader in Tech

Broadcom integrates multiple technologies to create software solutions and the system-on-chip (SoC) components used in the processing systems of smartphones, tablets, laptops, smart home devices, and many other technologies. Amid the surge in AI infrastructure, the company’s revenues are projected to reach $11 billion in FY 24, driven by its business in networking and custom-made chips, or Application-Specific Integrated Circuits (ASIC). Upcoming AI opportunities and a multi-billion-dollar chip supply agreement with Apple are driving exceptionally strong demand. 

Broadcom leads the market in a type of acoustic wave filter used in Wi-Fi and Bluetooth chips and high-end smartphones. Specifically, the company is the primary supplier of thin-film bulk acoustic wave resonator (FBAR) filters. Due to their high engineering complexity, FBARs are successfully manufactured by only a few companies, with Broadcom dominating this market segment. Within the networking segment, Broadcom has a substantial market share advantage. 

Key investment risks include competition, economic and geopolitical uncertainties, high debt levels, and the possibility of gradual erosion in Apple-related business. Broadcom’s software portfolio includes certain legacy and mature businesses, such as virtualization and mainframes, which are expected to show slower growth.  

Social and Environmental Impact Review

In alignment with the United Nations Paris Agreement and Science Based Targets initiative (SBTi), Broadcom has pledged to reduce its direct and indirect greenhouse gas emissions (scope 1 and 2) by 38% by 2030 and has committed to SBTi validation of its emissions reduction targets. The company is in the top 15% of companies assessed by EcoVadis for its sustainability initiatives.

Broadcom’s Supplier Environmental and Social Responsibility Code of Conduct sets standards for labor practices, environmental stewardship, and anti-corruption compliance.

The company’s Diversity@Broadcom initiative promotes a diverse and inclusive workplace and provides leadership forums to engage employees. To date, the company has not joined the list of companies gutting their DEI programs.  

Broadcom invests in STEM education and social impact in the communities where it operates, matching more than $1.4 million in employee charitable donations in 2023 and providing scholarships for STEM students. Through the Broadcom Foundation, the company advances equitable access to STEM education globally, emphasizing the inclusion of underrepresented communities in both urban and rural areas.

Broadcom’s dedication to ethical business practices and its tech market leadership make it a relevant and future-forward component of Clean Yield’s portfolio. 

Learn more about Broadcom Inc.