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Meta could become Broadcom’s upcoming billion-dollar customer: Report

Meta could become Broadcom’s upcoming billion-dollar customer: Report
Meta could become Broadcom’s upcoming billion-dollar customer: Report

According to JP Morgan, Facebook’s owner Meta Platforms Inc. is expected to use chips made by Broadcom to power its metaverse hardware, eventually becoming the American chipmaker’s upcoming billion-dollar ASIC customer.

Application-specific integrated circuit (ASIC) chips are designed for hyper-specific purposes such as artificial intelligence and machine learning. These chips are expected to generate around USD 2.5 billion for Broadcom by the end of 2022, driven by its partnerships with Microsoft and Alphabet as well as its deals with Meta.

For those unaware, Meta has been making heavy investments in the metaverse by adding new features to hardware devices that can be used to access the virtual world. The company is developing various hardware solutions for the metaverse such as virtual reality headsets and smart glasses.

The Facebook parent has already opened its first physical store for metaverse-related hardware products, allowing shoppers to try out these devices as well as other gadgets.

Meanwhile, the semiconductor solutions business of Broadcom that focuses on developing custom chips contributed to around 70% of the company’s overall revenue, which accounted for USD 27.5 billion in 2021.

Broadcom and Google have been working on custom chips since 2016, co-developing the latter’s custom chips that have been widely used for machine learning tasks. Speculations have it that this business is expected to generate around USD 1.3 billion in the year 2022.

In other news, Meta Platforms Inc. recently announced that its Class A common stock will soon be trading on Nasdaq under the symbol “META” before the market opens on June 9th. It is worth mentioning that the company was rebranded as Meta last year to focus on developing the metaverse as it bets that it will be the next technology frontier after the mobile internet.

Source Credits –

https://brandequity.economictimes.indiatimes.com/news/digital/meta-will-become-broadcoms-next-billion-dollar-customer-jp-morgan/91936732

About the author

Vinisha Joshi

Vinisha Joshi

Despite graduating with an engineering degree in electronics and communication, Vinisha Joshi chose the road less travelled, and decided to pursue her career in content writing . Currently, she pens down articles for cuereport.com and a few other distinguished news platforms, pertaining to business and finance.