Samsung wins $200bn Broadcom deal to challenge TSMC
Samsung Electronics secured a $200 billion partnership with Broadcom to manufacture custom AI chips, a major step in its bid to close the foundry gap with market leader TSMC.
Samsung Electronics and Broadcom have signed a memorandum of understanding for a wide-ranging semiconductor partnership valued at more than $200 billion through 2030. The agreement covers contract chip manufacturing, memory chips and advanced packaging.
Under the deal, Broadcom will use Samsung's sub-2-nanometre process technology to manufacture its next-generation communications chips designed for high-speed data transfer. The two companies will also jointly develop next-generation high-bandwidth memory (HBM) products.
By focusing on application-specific integrated circuits (ASICs), Broadcom is targeting chips built for highly specific computational tasks rather than broad processing. Samsung's ability to provide the manufacturing backbone for these bespoke designs positions it to capture a growing share of the AI supply chain.
The partnership capitalises on a structural shift among global technology firms away from general-purpose graphics processors toward custom AI accelerators. As hardware makers seek specialised silicon, securing long-term production commitments from a top-tier AI chip designer directly bolsters Samsung's capacity utilisation.
For Samsung's foundry division, the Broadcom pact represents a critical strategic asset in its prolonged effort to close the competitive gap with industry leader TSMC. The deal provides guaranteed volume for Samsung's advanced manufacturing facilities, which is essential for justifying the immense capital expenditure required to develop sub-2-nanometre nodes.
"The expanded collaboration ... reflects Samsung's focus on supporting customers with end-to-end semiconductor technologies across an increasingly diverse range of AI and high-performance computing applications," Samsung said. This follows recent discussions between Samsung co-CEO Jun Young-hyun and Nvidia chief executive Jensen Huang regarding future HBM4E and HBM5 memory products. Samsung has signalled it expects to secure further advanced 2-nanometre orders soon, building on last year's $16.5 billion contract to make logic chips for Tesla.
