ASIC (application-specific integrated
circuit) chips will drive $2 billion to $2.5 billion in revenue for Broadcom
this year, helped by its deals with Meta and partnerships with Alphabet and
Microsoft, the analysts said.
"We believe these wins are primarily
at 5 nanometre and 3 nanometre and will be used to power Meta's metaverse hardware
architecture that it will deploy over the next few years," analyst Harlan
Sur said.
Meta is investing heavily in the metaverse
— a virtual space where people interact, work and play — by adding new features
to hardware devices that serve as access points to the virtual world.
Sur added that Meta will emerge as
Broadcom's next $1 billion a year ASIC customer over the next three to four
years after Google.
ASICs are designed to perform
hyper-specific tasks, including in AI and machine learning, efficiently.
Broadcom and Google have co-developed
Google's custom chip used for machine learnings tasks since 2016 and the
brokerage estimates this to be worth over $1.3 billion in 2022.
Meta is developing a range of hardware
products for the metaverse that include smart glasses and virtual reality
headsets, and has even opened its first physical store where shoppers can try
out these devices and other gadgets.
"Near-term ASIC program pipeline is
strong as we believe Broadcom will be ramping Meta/Facebook and Microsoft ASICs
this year," Sur added.
Broadcom's semiconductor solutions
business, which makes custom chips, contributed more than 70 percent to the
company's nearly $27.5 billion revenue in 2021. © Reuters