The basic underlying theme to watch at Broadcom (BRCM) continues to be the progress with the launch of new, more highly integrated products at more advanced progress geometries. Order patterns have normalized after a dismal 2009 which saw inventory corrections by most OEMs.

The second half of 2009 witnessed a bit of recovery and we expect demand will improve significantly in 2010. Broadcom recently initiated a quarterly dividend of 8 cents per share, which translates to a dividend yield of 0.9%.

In view of the expected strong recovery in the semiconductor industry and Broadcom’s market leadership position, we upgrade our rating to Outperform from Neutral.Zacks Investment Research