Economy & Economic Development  February 18, 2020

Apple’s Coronavirus fears may impact Broadcom’s Fort Collins plant

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SAN JOSE, California — Apple Inc. (Nasdaq: AAPL) said the ongoing coronavirus crisis in China continues to hamstring its assembly plants in the country, which may affect operations at the Fort Collins plant owned by semiconductor maker Broadcom Inc. (Nasdaq: AVGO).

The Cupertino tech behemoth warned investors that it will likely miss revenue projections for the quarter as its assembly plants across China slowly return to production and constrain supply around the world, along with depressed sales in the country due to all of its stores being closed.

COVID-19, the highly infectious respiratory disease more commonly referred to as coronavirus, has effectively shut down Hubei Province in central China. Government officials have urged businesses and schools across the country to stay closed to prevent its spread, reducing the output of the world’s largest manufacturing economy. 

About 72,400 people in China have been diagnosed with the virus as of Tuesday afternoon, with 1,868 dead.

That may cause a production slowdown in Broadcom’s factory in Fort Collins, which produces wireless radio frequency parts. Broadcom signed a pair of deals with Apple to supply “specified high-performance components and modules” over the next 3½ years, which are estimated to provide as much as $15 billion in revenue.

Broadcom mostly outsources its production, but specifically makes film bulk acoustic resonator components in Fort Collins to protect intellectual property processes, according to its most recent annual report with the U.S. Securities and Exchange Commission.

Broadcom did not respond to a request for comment Tuesday afternoon.

Apple’s announcement caused a selloff in semiconductor stocks, with the PHLX Semiconductor Index falling 1.4 percent on the day. That index includes Broadcom’s stock, which fell 2.21 percent on the day to close at $310.75 per share.

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