Broadcom’s Enterprise Storage segment
Broadcom (AVGO) earns almost 80% of its revenue from Wired and Wireless businesses. It is looking to expand its Enterprise Storage business, which currently contributes 17% towards its revenue, by acquiring Brocade Communications Systems (BRCD). However, the acquisition is currently uncertain due to pending regulatory approvals.
While this acquisition is delayed, Broadcom has been rumored to be one of the bidders for Toshiba’s (TOSBF) NAND business which again would expand the former’s Enterprise Storage segment. This segment offers HDDs (hard disk drives), SSD (solid state drive) flash controllers, server storage, and PCIe (peripheral component interconnect express) switches and bridges.
Enterprise Storage earnings
Enterprise Storage revenue rose 36% YoY (year-over-year) and 1% sequentially to $712 million in fiscal 2Q17. The segment delivered better results even in a weak season. The company expected revenue declines in fiscal 2Q and 3Q17. However, seasonal weakness in Fiber Channel shipments was offset by strength in HDD and custom SSD shipments. This increase in demand comes due to a supply shortage in the NAND Flash market.
The company expects this trend to continue in fiscal 3Q17 as it sees strong order bookings for the quarter. It expects its Enterprise Storage revenue to grow between 1% and 3% sequentially to $726 million in fiscal 3Q17.
Broadcom’s new data center SoC
Broadcom has unveiled BCM58800 series, its new data center SoC connectivity solution. It is the industry’s first 100G Smart NIC (network interface controller) SoC that is optimized for NVMe-oF (Nonvolatile memory-over-Fabric) Storage Target Controller.
The BCM58800 SoC is ideal for Smart NIC and scale-out storage applications and offers next-generation server and storage technologies that meet the need for accelerated data center systems. Broadcom launched this new SoC at a time when Intel (INTC) and Advanced Micro Devices (AMD) started ramping their new server CPUs.
Features of BCM58800
The BCM58800 is built on the 16nm (nanometer) FinFET+ (Fin Field Effect Transistor) node which improves its performance while reducing power consumption. The SoC connects Broadcom’s NetXtreme Ethernet controller and TruFlow packet processing technology to high-speed interfaces to accelerate the performance of applications.
The SoC features eight high-performance 3GHz (gigahertz) 64-bit ARM v8 Cortex-A72 cores and 100G encryption and decryption. The SoC’s three DDR memory channels deliver up to 50% higher memory bandwidth than dual channel memory thereby improving the performance of applications. The SoC is easy to deploy as it meets industry standard server form factors.
Broadcom is currently sampling the BCM58800 with partners such as QCT, CNEX Labs, and Celestica. Broadcom and CNEX Labs have developed an Open-Channel SSD technology that enables cloud companies to deliver scalability and flexibility while ensuring consistent high-performance for all applications. While CNEX SSD identifies every application separately, Broadcom’s NetXtream SOC (system-on-chip) delivers high performance to each application.
Next, we will look at Broadcom’s Industrial segment.