Sam Boughedda

JPMorgan analyst Harlan Sur said that the custom chip (ASIC), design pipeline for Semiconductor Chip Company Broadcom is growing at Meta/Facebook.

An analyst stated that Meta’s metaverse architecture will be executing on the analysis. It will also require silicon compute capability in areas such as AI/ML and video processing. Sur is confident that Broadcom has won multiple ASIC contracts with the social media company.

Meta is making a big play in the metaverse with its Oculus headsets, although it has so far run into issues with user retention, although that hasn’t stopped its investment in the space.

Sur said that Broadcom “believes Broadcom will ramp up video transcode ASICs onto Meta/Facebook within the 2H this year and AI/ML processings inside the 2023/2024 window.”

“All totaled, we believe that Meta/Facebook will emerge as Broadcom’s next $1B+/year cloud ASIC customer over the next 3-4 years,” he added.

Furthermore, they believe Broadcom will be “ramping Google’s 5th gen (TPU v5 at 5nm) in the 2H of this year.”

“All totaled, we believe that Broadcom’s cloud accelerated compute ASIC revenues will drive $2-$2.5B in revenues this year – Google (NASDAQ:), Meta/Facebook, and Microsoft (NASDAQ:) we believe are the primary drivers. The analyst stated that the market for high-end custom ASIC chips is expected to grow at 12-15% annually over the next few decades. Broadcom (#1 market share and Marvell (NASDAQ)) will remain the main beneficiaries.”