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Beyond OpenAI, Broadcom has confirmed ASIC orders from Google, Meta, and ByteDance, with Google's demand described as the largest.

Additional contracts are expected as projects advance, including ByteDance's second-generation ASIC, xAI's cloud-focused chip, and Apple's custom silicon. Production is slated for 2026 and 2027, with ByteDance likely leading in 2026, followed by xAI and Apple in 2027.

Google and Meta are developing successive ASIC generations scheduled for mass production between 2027 and 2028. ByteDance and OpenAI are also advancing next-generation designs, with rollout expected after 2028.

MediaTek has secured AI inference ASIC orders from Google and Meta, while competitors, including Marvell and Alchip, supply AWS, Microsoft, and Intel.

Industry insiders caution that while GPUs and ASICs overlap in some applications, the two markets will remain complementary. Nvidia and Broadcom are likely to dominate their respective domains, with fiercer rivalry expected in networking chips than in direct GPU–ASIC competition.

Hock Tan, the Broadcom CEO, is objectively a top 3 fabless semiconductor CEO, alongside Nvidia’s Jensen Huang and AMD’s Lisa Su.

There’s this notion that Broadcom acts like a strip-mining private equity roll-up operator that is constantly raising prices, cutting R&D, raising debt, to acquire more companies. This is undeserved FUD, but it causes many people to be reluctant of positivity towards Broadcom.

FUD(Fear, Uncertainty, and Doubt): 恐惧、不确定性和怀疑

It is a platform company focused on technology that acquires companies that sell market leading products with sticky customers, recurring revenue, and high margins but have excessive operating expenses and are generating below potential profit and cash flow.

Broadcom then cuts costs deeply, eviscerating layers of middle management, cutting sales and marketing functions down to those needed to directly support individual products, and almost completely eliminating general and administrative costs in favor of utilizing Broadcom’s existing corporate platform resources.

Research and development is a different story. Broadcom does eliminate science projects with unclear near-term return on investment as well as common research and development functions not directly driving revenues, but it leaves product teams intact. With layers of middle management cut out and a multitude of committees eliminated, product teams can obtain approval for plans directly from senior management and can execute them with greater alacrity. By loading overhead costs onto the product groups’ P&L and holding managers accountable for the group’s results, Broadcom has further driven a culture of efficiency and in many cases their market share has grown.

The perception of high debt loads is also another source of pushback, with the acquisition of VMWare taking Broadcom up to 2.9x debt/LTM Adjusted EBITDA. While Broadcom does load up debt when they acquire companies, we think the track record of growing free cash flow while deleveraging quickly post-acquisition AND paying shareholders considerable dividends while conducting buybacks mitigates this concern.

In 1999, HP decided to spin out businesses that were not tied to its core Enterprise Servers, Software, PC and Printers divisions. Agilent was spun out in 1999, containing HP’s test and measurement business. The semiconductor division within Agilent was further spun out in 2005 to a KKR and Silver Lake-led private equity consortium. By late 2005, the company was rebranded as Avago.

Hock Tan, our protagonist, took the helm as Avago’s CEO in 2006, setting the stage for the evolution of today’s Broadcom.

His first major move was in 2008 when he purchased Infineon’s Bulk Acoustic Wave (BAW) business for $30M, bringing the Film Bulk Acoustic Resonator (FBAR) Filter product into the fold – a deal that arguably ranks as one of the most profitable M&A transactions of all time.

In late 2013, Avago made its first major acquisition, purchasing LSI for its networking, storage and nascent custom silicon business.

Broadcom’s subsequent acquisition of Brocade Communications in 2016 solidified the storage segment by adding Brocade’s Fibre Channel and SAN directors to the segment.

One of Hock Tan’s biggest moves was Avago’s 2015 acquisition of Broadcom.

In 2018, just as investors and analysts were starting to see the fruits of Broadcom’s strategy and take a more constructive stance towards it, Broadcom shifted the landscape once again by acquiring CA Technologies, a company that focuses on Mainframe IT management and monitoring software and application development tools that essentially help manage, connect and coordinate disparate IT systems within an enterprise.

Broadcom followed up with its acquisition of Symantec’s Enterprise business in 2019. Symantec’s business focuses on Endpoint Protection, Secure Web Gateways and Data Loss Prevention.

SAN JOSE, Calif. and SINGAPORE, Dec. 16, 2013 (GLOBE NEWSWIRE) -- Avago Technologies Limited (Nasdaq:AVGO) and LSI Corporation (Nasdaq:LSI) today announced that they have entered into a definitive agreement under which Avago will acquire LSI for $11.15 per share in an all-cash transaction valued at $6.6 billion.

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