Mumbai, Mar 05 : Chip designer Broadcom on Wednesday projected its artificial intelligence (AI) chip revenue would exceed $100 billion by 2027, reflecting surging demand for custom AI processors in a market largely led by Nvidia. The announcement also triggered a more than 4% rise in Broadcom’s shares during after-hours trading, following news of a new $10 billion share repurchase program set to continue through year-end.
Big technology companies, including Alphabet, Microsoft, Amazon, and Meta, are expected to spend over $630 billion this year on AI infrastructure, further fueling demand for chips, servers, storage, and networking equipment from suppliers like Broadcom.
“Our visibility in 2027 has dramatically improved. We now see AI revenue from chips exceeding $100 billion in 2027,” CEO Hock Tan said during a post-earnings call. Broadcom anticipates second-quarter revenue of around $22 billion, surpassing analyst estimates of $20.56 billion, with AI chip sales projected at $10.7 billion for the quarter.
Unlike full-chip designers, Broadcom works closely with clients such as Google and OpenAI to develop custom processors. Its engineers translate early designs into physical chip layouts, which are then manufactured by partners such as TSMC.
Analyst Gil Luria of D.A. Davidson highlighted that Broadcom’s long-term guidance demonstrates strong growth potential: “Visibility into results more than a year out indicates significant demand expansion.”
Broadcom also plans to deliver 1 gigawatt of AI tensor processing units (TPUs) for Anthropic in 2026, increasing to 3 gigawatts in 2027. The company is set to ship OpenAI’s first custom AI chip in 2027, with volumes approaching major AI chipmakers like Nvidia and AMD.
Despite market concerns over Meta’s AI chip business, Tan clarified, “Meta’s custom accelerator MTIA roadmap is alive and well. We’re shipping now.” Broadcom expects to sell at least 1 million chips using its stacked design technology by 2027, potentially generating billions in revenue.
The company’s infrastructure software segment showed slower growth, rising only 1% to $6.8 billion in Q1, below analysts’ expectations of 2.6%. Broadcom’s overall first-quarter revenue climbed 29% to $19.31 billion, exceeding the consensus of $19.18 billion, while adjusted earnings per share came in at $2.05 versus estimates of $2.03. AI revenue more than doubled to $8.4 billion in the quarter ending February 1, fueled by demand for custom accelerators and AI networking solutions.
This performance underscores Broadcom’s strategic positioning in the booming AI market and its growing influence in the custom chip segment as global tech giants expand their AI infrastructure.