Broadcom Inc reported modest quarterly sales growth and reiterated a muted forecast for the rest of the fiscal year, indicating that the trade dispute between China and the US is still suppressing demand for semiconductors.

Sales in the period ended Aug. 4 rose 9 percent to US$5.52 billion, the San Jose, California-based company said in a statement on Thursday.

Before certain items, profit in the fiscal third quarter was US$5.16 a share. That compares with average analyst estimates for per-share profit of US$5.13 on sales of US$5.52 billion, according to data compiled by Bloomberg.

Broadcom said it still expects revenue in fiscal 2019 to be US$22.5 billion, a lowered projection it made in June.

CEO Hock Tan (陳福陽) has built a US$100 billion firm through a spate of acquisitions, including his purchase of part of Symantec Corp for US$10.7 billion last month.

While Broadcom has one of the broadest reaches in the technology industry, that diversity has not made it immune to the ongoing trade dispute between the US and China and blacklisting of Huawei Technologies Co (華為), which is hammering Tan’s semiconductor business.

“We believe demand has bottomed out, but will continue to remain at these levels due to the current uncertain environment,” Tan said in the statement.

There is little visibility due to the trade war and no sense of a “sharp recovery around the corner,” he said on a conference call.

About half of the chips Broadcom sells are either used in China or sent through factories there on the way to becoming part of electronic devices sold around the world.

Last year, Huawei accounted for about US$900 million of Broadcom’s sales, Tan has said.

The chipmaker’s position as a major manufacturer of components for Apple Inc and Samsung Electronics Co means its orders are seen as a gauge of confidence in future demand from some of the world’s largest smartphone makers.

It is also one of the leading suppliers of networking components used by large data-center operators, such as Alphabet Inc’s Google and Inc’s cloud division.

Tan said that there is a “seasonal uptick” in demand for phone parts because of the launch of new models from his “large North American customer,” using his typical reference for Apple

Orders at this point are typical of the buildup ahead of a phone release and sales of the devices will determine demand in the future.

Apple’s iPhone 11 goes on sale on Friday next week.

Three months ago, Tan pared back his revenue forecast for the year, indicating that sales in each of the remaining quarters would be US$1 billion lighter than previously expected.

That has held back Broadcom’s stock, which is up 18 percent this year, compared with a 39 percent advance by the Philadelphia Stock Exchange Semiconductor Index.

In the current circumstances, the company will prioritize paying down debt over buying back shares, chief financial officer Tom Krause said on the conference call.

Doing so is important to retaining the company’s investment-grade credit rating.

Net income in the fiscal third quarter declined to US$715 million, or US$1.71 a share, from US$1.2 billion, or US$2.71, a year earlier, Broadcom said.

Chip unit sales were about US$4.4 billion in the recent period, accounting for 79 percent of the company’s total revenue.

They were down 4.7 percent from a year earlier.