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Broadcom a drag on FoundPac
Ho Chung Teng | 09 Feb 2018 00:30
Almost half of the company’s sales come from US-based Broadcom
Precision engineering parts fabricator and supplier FoundPac Group Bhd, which has been Broadcom Ltd’s supplier for about 12 years, is highly dependent on the US-based semiconductor giant, with almost half of its sales coming from the latter.

This strong relationship has served FoundPac well as it is able to sell at a good gross profit margin of above 40% on average.

However, when Broadcom slowed its purchases following its merger with Singapore-based Avago Technologies Ltd in 2016, FoundPac’s sales declined.
 
In the financial year ended June 30, 2017, FoundPac’s sales to Broadcom declined by 75.31% year-on-year to RM5.19 mil. In FY16, Broadcom had contributed 47.7% or RM21.04 mil to the company’s total revenue.