- Facebook parent Meta Platforms Inc (NASDAQ:FB) looks to use Broadcom Inc's (NASDAQ:AVGO) custom chips to build its metaverse hardware, becoming the chipmaker's next billion-dollar ASIC customer, J.P. Morgan analysts said.
- The analysts saw application-specific integrated circuit chips drive approximately $2 billion to $2.5 billion in revenue for Broadcom in 2022, aided by its deals with Meta and partnerships with Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) and Microsoft Corp (NASDAQ:MSFT).
- Analyst Harlan Sur believed the wins were primarily at 5-nm and 3-nm and will power Meta's metaverse hardware architecture that it will deploy over the next few years.
- "Near-term ASIC program pipeline is strong as we believe Broadcom will be ramping Meta/Facebook and Microsoft ASICs this year," Sur added.
- Sur saw Meta emerge as Broadcom's next $1 billion-a-year ASIC customer over the next three to four years after Google.
- Broadcom and Google have co-developed Google's custom chip used for machine learning tasks since 2016, and JPM estimates the chips to be worth over $1.3 billion in 2022.
- Price Action: AVGO shares traded higher by 0.11% at $583.92 on the last check Tuesday.
