New York, NY – Broadcom, the US-based semiconductor giant, has emerged as a formidable competitor to Nvidia, the current market leader in artificial intelligence (AI) chips. With major tech companies seeking to reduce their reliance on Nvidia, they are increasingly turning to Broadcom, which specializes in custom-designed chips known as application-specific integrated circuits (ASICs).

Broadcom's shares surged 11.21% to $250 on the New York Stock Exchange on Monday, following a 24.4% jump the previous day. This surge propelled the company's market capitalization above $1 trillion, making it the third-largest semiconductor company globally, behind Nvidia and TSMC.

Conversely, Nvidia's shares have declined for three consecutive trading days, relinquishing its position as the second-most valuable company to Microsoft.

In its latest earnings report on Tuesday, Broadcom announced that it is collaborating with three major cloud computing companies to develop AI chips. These companies have been identified as Google, Meta (formerly Facebook), and ByteDance, the parent company of TikTok.

Hock Tan, CEO of Broadcom, projected that these companies will deploy a combined total of one million custom AI chips in their data centers by 2027. He further forecast that this collaboration would propel Broadcom's AI chip market to a value between $60 billion and $90 billion by 2027. Additionally, Broadcom has revealed partnerships with OpenAI and Apple.

The market's positive reaction to these developments reflects the growing expectation that Broadcom's collaboration with big tech firms will erode Nvidia's dominance in the AI chip market, which currently accounts for over 90% of the market.

Traditionally known for designing chips for communication equipment, Broadcom has recently gained prominence in the development of ASICs, which are tailored to specific tasks. These custom chips offer advantages in terms of power efficiency and cost compared to general-purpose graphics processing units (GPUs). As AI workloads shift from training to inference, the demand for ASICs has surged.

JP Morgan has projected that the ASIC market, currently valued at $20 billion to $30 billion, will grow by more than 20% annually, with Broadcom capturing a dominant market share of 55% to 60%.

This shift in the AI chip landscape is expected to intensify competition and drive innovation in the semiconductor industry, ultimately benefiting consumers and businesses alike.

[ⓒ Global Economic Times. 무단전재-재배포 금지]