Samsung, Broadcom Strike $200 Billion AI Pact
Synopsis
The long-term deal strengthens Samsung's foundry ambitions as demand for AI chips continues to surge.
Key Highlights
- Samsung Electronics enters into over US$ 200 billion partnership agreement with Broadcom until the end of 2030.
- The two companies will increase cooperation on memory chips, contract chip manufacturing and advanced packaging.
- The transaction gives an extra bump to Samsung’s efforts to ramp up its AI chip and foundry business.
Samsung Electronics said it has signed a memorandum of understanding with Broadcom to deepen collaboration on memory chips, contract chip manufacturing and advanced packaging within a deal, worth over US$200 billion through 2030.
The deal will provide long-term production commitments for Samsung from Broadcom, which is one of the world's largest custom AI chip designers and competition continues to solve AI Chips.
Five-Year AI Chip Collaboration
The broadening partnership underscores Samsung’s focus on offering comprehensive semiconductor technologies for AI and high-performance computing applications, the company said.
The two companies plan to use Broadcom’s strengths in application-specific integrated circuit (ASIC) design with Samsung’s semiconductor manufacturing capabilities over a period of five years.
The deal will see Broadcom produce high-speed data transfer chips for communications on Samsung’s sub-2-nanometre process technology. The pair will also co-design next-generation high-bandwidth memory (HBM) products.
Boost for Samsung’s Foundry Business
Enterprises large and small are increasingly expected to be power players but garnering appealing tech customers should bolster Samsung’s foundry offerings, closing a dual path of preparing for continued competition from rivals like TSMC.
Earlier, Samsung co-CEO and head of its chip division Jun Young-hyun mentioned he talked about the future foundry cooperation with Nvidia CEO Jensen Huang over the next-generation HBM4E and HBM5 memory products.
This year, Samsung had said it is targeting further high-end 2nm foundry orders after talks with major technology firms. The company secured a US$16.5 billion contract from Tesla to produce logic chips last year.
Source: Reuters
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