In the past, people might have only recognized NVIDIA, AMD, and TSMC, but now another low-profile yet powerful AI chip giant, Broadcom (AVGO), is also making a strong emergence. Not only has its performance skyrocketed, but it also broke through a market value of $1 trillion by the end of 2024, surpassing Tesla and TSMC, ranking ninth among the world's top ten companies by market value.

Why Broadcom deserves attention

  • Possesses core design and supply capabilities for AI chips

  • Hardware & Software serve as stable revenue sources; even with fluctuations in chip markets, enterprise software can balance risks

  • Tech giants like Google, Meta, and AWS are major partners

Business model breakdown, dual approach of hardware and software

Broadcom's business model relies on two major segments: hardware and software

  1. Semiconductor business (58%): Providing high-end network switching chips, customized AI chips (ASIC), storage controllers, base station chips, etc.

  2. Infrastructure Software (42%): Providing enterprise virtualization, network security, IT automation, and other tools by acquiring other service providers to enhance stickiness

This allows Broadcom to simultaneously operate in:

  1. Cloud Computing Architecture Underpinning

  2. AI Training Chip Supply Chain

  3. Enterprise Software Services

Surviving in three major fields, it is one of the few companies that can profit from AI hardware all the way to software services.

Acquired virtualization software provider VMware for $61 billion, entering the software market

Broadcom's predecessor was originally a company specializing in high-end chips, known as Avago Technologies. In 2016, Avago acquired the original Broadcom and retained the name, subsequently expanding its product lines to:

  • Data Center

  • Broadband

  • Wireless Network Chips

  • Storage

  • Industrial Applications

Subsequently, in 2023, Broadcom further acquired cloud computing and hardware virtualization software service provider VMware for $61 billion, officially entering the infrastructure software market. After integrating VMware, what does Broadcom gain:

  • Gained technical control over 'how AI systems are deployed to cloud servers'

  • VMware's technology enables enterprises to more easily install, operate, and manage AI models in cloud environments without needing to rewrite much of the underlying architecture

Seizing the AI gold rush, from data centers to customized chips

With the rise of generative AI, tech giants are rushing to build AI servers and actively train AI models, leading to a surge in chip demand. In response, NVIDIA has captured the bulk GPU market, while Broadcom has taken a different path by focusing on 'customized AI chips' (ASIC) for cloud giants.

For example, Google's Tensor Processing Unit (TPU) is designed by Broadcom, and Meta has also partnered with them to create internal AI chips.

This allows Broadcom's AI semiconductor revenue to reach $12.2 billion in 2024, a year-on-year increase of 220%, with AI business alone accounting for 41% of the company's semiconductor revenue, making it another AI chip giant.

The image shows the Google TPU disassembly diagram provided by Broadcom, where the main chip is provided by Broadcom, with revenue and market value both reaching new highs, and market value once hitting $1.15 trillion.

Broadcom's overall revenue reached $51.57 billion in fiscal year 2024, with the contribution from semiconductors still dominating (58%), but the software segment (42%) is also growing rapidly.

Even more astonishing, by the end of 2024, Broadcom's market value surpassed $1 trillion for the first time, and in 2025, it surged to $1.15 trillion, ranking alongside Apple, Microsoft, and NVIDIA, advancing into the top ten companies by market value globally.

The image shows Broadcom setting a record with a market value of $1.15 trillion in January 2025; future prospects indicate that AI chip revenue will reach $90 billion.

According to Broadcom CEO Hock Tan during the earnings call in December 2024, it is estimated that by 2027, the market size of the AI chip sector that Broadcom can actually participate in and profit from will grow to between $60 billion and $90 billion.

This forecast reflects the strong growth in demand for AI chips, driving Broadcom's stock price up by 21% on that day, with market value surpassing $1 trillion. The acquisition of VMware was aimed at 'locking in enterprise customers' and strengthening the foundation for AI applications.

Will it be NVIDIA's (NVIDIA) strongest competitor?

From a technical perspective, it may not be the case, because:

  • Broadcom focuses on customized AI ASIC chips, binding with tech giants like Google, Meta, TikTok, and AWS

  • NVIDIA focuses on high-end chips centered around GPUs that everyone can use

Although NVIDIA still dominates the entire AI chip industry in terms of revenue and influence, Broadcom is gradually establishing a foothold in the core business of cloud customers. In the future, as major platforms invest in self-developed AI chips, Broadcom's role will become increasingly important.

This article, with a market value that once reached $1.15 trillion! How AI chip giant Broadcom AVGO broke into Google, Meta, and AWS first appeared in Chain News ABMedia.

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