Samsung Lands $200 Billion Broadcom AI Chip Partnership in Major Foundry Win

Samsung Electronics and Broadcom have signed a memorandum of understanding to expand a strategic semiconductor partnership that the companies estimate will be worth more than $200 billion through 2030.

The partnership is expected to support Broadcom’s growing portfolio of custom artificial intelligence processors and strengthen Samsung’s position in the rapidly expanding AI infrastructure market.

The agreement broadens the companies’ collaboration across several areas of semiconductor production, including advanced memory chips, contract manufacturing, and advanced packaging technologies.

For Samsung, the deal is a major endorsement of its semiconductor manufacturing capabilities, putting it in competition with Taiwan Semiconductor Manufacturing Co. (TSMC) and Intel Foundry. The company has run far behind TSMC in chip manufacturing, but then again, everyone is running behind TSMC.

Under the agreement, Broadcom plans to use Samsung’s sub-2-nanometer manufacturing process to fabricate next-generation communications chips used in AI infrastructure. The companies will also deepen cooperation on high-bandwidth memory (HBM), a vital component for AI accelerators. Samsung is one of the three manufacturers of HBM memory, the other two being Micron Technologies and SK hynix.

The collaboration also extends beyond wafer fabrication to include advanced chip packaging, an increasingly important technology for AI processors that combine multiple chiplets and high-bandwidth memory into a single package.

AI is driving unprecedented demand for tightly integrated semiconductor technologies spanning memory, logic, and advanced packaging,” Young Hyun Jun, CEO of the device solutions division at Samsung Electronics, said in a press release.

According to Barron’s, J.P. Morgan analyst Harlan Sur on Monday wrote the firm believes Samsung will continue to be Broadcom’s main supplier of high bandwidth memory. Sur estimated that over the length of the agreement, Broadcom’s purchase mix from Samsung will be about 90% to 95% memory and between 5% and 10% foundry wafer.

Broadcom has emerged as one of the industry’s leading designers of custom AI chips for hyperscale customers, creating opportunities for foundries capable of manufacturing cutting-edge silicon. It makes custom AI accelerators for hyperscale customers, high-speed networking processors, and AI infrastructure tools.