Broadcom, a U.S. fabless semiconductor company, forecasts that sales of artificial intelligence (AI) chips will double each year over the next two years.
CEO Hock Tan stated during a conference call on September 2, following the release of the company's third-quarter results for fiscal year 2026, that AI chip sales are expected to reach $115 billion in fiscal year 2027 and $230 billion in fiscal year 2028. In the third quarter, Broadcom reported AI sales of $16.7 billion, exceeding market expectations of $15.9 billion, and anticipates nearly doubling this figure annually for the next two years.
Tan also projected that Broadcom's earnings per share (EPS) for fiscal year 2028 would surpass $30, exceeding the LSEG estimate of $25.86.
He noted that major AI companies, including Google, OpenAI, and Meta, are actively seeking ways to complement NVIDIA's AI chips through in-house chip development, contributing to the strong performance of Broadcom's AI chip business. Notably, OpenAI and Anthropic, two leading players in the AI sector, are competing to expand their infrastructure, with Anthropic expected to become Broadcom's largest customer next year, surpassing Google.
"We have six customers, and four of them are expected to place significant orders," Tan said, adding that demand for AI chips currently exceeds Broadcom's supply capacity. As AI companies increasingly invest in developing their own chips to replace or supplement the expensive NVIDIA AI chips, Broadcom's reputation for semiconductor design is also rising. For instance, OpenAI's recently unveiled AI chip 'Jalapeño,' developed in collaboration with Broadcom, has been praised for outperforming NVIDIA's latest AI chips.
Following Tan's remarks, Broadcom's stock initially dropped about 4% in after-hours trading due to disappointing guidance but later rebounded. The stock closed at $362.23, down $3.01 (0.82%) from the regular trading session.
Broadcom's third-quarter revenue and EPS were reported at $29.59 billion and $3.32, respectively, marking increases of 86% and 96% year-over-year, surpassing LSEG estimates of $29.36 billion and $3.24. However, the fourth-quarter revenue guidance of $34.8 billion fell short of the expected $35.03 billion, leading to some disappointment regarding future performance.
Meanwhile, Bloomberg reported that competition in the field of in-house chip development is intensifying within the AI industry. For example, Google, which has collaborated with Broadcom on Tensor Processing Unit (TPU) development for an extended period, recently entered into a new semiconductor co-development agreement with U.S. semiconductor company Marvell Technology.
* This article has been translated by AI.
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