Broadcom announced on Thursday that its custom chip unit, responsible for developing AI processors for cloud providers, has created a new technology designed to significantly enhance semiconductor speeds. This innovation comes amidst a surge in demand for generative artificial intelligence infrastructure.
Broadcom, headquartered in Palo Alto, California, is capitalizing on the growing need for AI hardware. Hyperscale companies are increasingly relying on Broadcom’s custom chips to diversify their supply chains and reduce dependence on Nvidia’s expensive processors.
The newly developed technology, known as 3.5D XDSiP, enables Broadcom’s custom-chip clients to increase memory capacity within each packaged chip. It achieves this by directly connecting critical components, resulting in a significant performance boost.
This advancement leverages advanced packaging techniques, specifically chip-on-wafer-on-substrate, from TSMC, the world’s leading contract chip manufacturer. However, limited capacity for these advanced techniques poses a significant bottleneck in the AI chip supply chain.
Broadcom confirmed that five products incorporating this new technology are currently under development, with production and shipments slated to commence in February 2026.
While Broadcom remains discreet about the specific cloud companies it collaborates with on custom chip development, industry analysts widely speculate that tech giants Google and Meta Platforms are among its key customers.
“Our hyperscale customers continue to scale up and scale out their AI clusters,” stated Broadcom CEO Hock Tan in September. During that announcement, the company revised its AI revenue forecast for fiscal year 2024 to $12 billion, an increase from the previous projection of $11 billion.
According to Tan’s September statement, the chipmaker, which also supplies networking equipment for data centers, currently serves three primary customers for its custom processor unit.
Broadcom’s main competitor in the custom chip market is Marvell. Marvell COO Chris Koopmans recently estimated that the total market for custom chips could reach approximately $45 billion by 2028, with Broadcom and Marvell dominating the landscape.
Summit Insights senior analyst Kinngai Chan supports this projection, anticipating further expansion of the custom chip market, ultimately benefiting both Marvell and Broadcom.
