Broadcom Predicts $100 Billion AI Chip Revenue by 2027
U.S. semiconductor design company Broadcom has forecast a major breakthrough in the artificial intelligence (AI) chip market. In an earnings report released on Wednesday (March 4), the company said its annual revenue from AI chips could exceed $100 billion by 2027. The company is now positioning itself to compete with Nvidia, which currently dominates the global AI chip market. The news was reported by Reuters.
Broadcom Chief Executive Officer Hock Tan said during a conference call, “Our visibility for 2027 has improved dramatically. We can now clearly see that generating more than $100 billion in AI revenue from chips alone is achievable.”
The company said its AI chip revenue in the current quarter (second quarter) is expected to reach $10.7 billion. Broadcom has set its overall revenue target for the second quarter at $22 billion, which exceeds analysts’ forecasts.
In the first quarter (ending in February), Broadcom’s revenue increased by 29 percent, reaching $19.31 billion. Revenue from its AI business rose 106 percent, reaching $8.4 billion.
Major technology companies such as Alphabet, Microsoft, Amazon, and Meta are expected to spend at least $630 billion this year to build AI infrastructure.
Rather than designing complete AI chips independently, Broadcom assists clients in developing custom chips tailored to their needs. The company is currently working on Google’s Tensor Processing Unit (TPU) and on developing a proprietary processor for OpenAI. Broadcom engineers convert initial design concepts into the physical structure of chips, which are later manufactured by companies such as TSMC.
Hock Tan also said that 1 gigawatt of TPU capacity will be supplied for the AI startup Anthropic in 2026, and demand is expected to rise to 3 gigawatts in 2027. Broadcom has also set a target to ship OpenAI’s first AI chip in 2027.
Broadcom is also working with Meta Platforms. Although recent reports suggested that Meta is planning to develop its own custom silicon, Hock Tan said the company’s relationship with Broadcom remains “active and strong.”
Following the strong forecast, Broadcom’s share price rose by nearly 5 percent. The company also announced a $10 billion share buyback program to be completed by the end of this year.
DBTech/BMT/OR
