Broadcom Eyes Intel Takeover in Ambitious Chip Industry Shakeup with TSMC
1min read As of last week, Broadcom (AVGO) experienced a decline of 1.17% over a two-day period, marking a total two-day drop of 1.40%. However, the company has seen a weekly uptrend of 3.63%, with year-to-date growth of 0.52% and a current market capitalization of $1.092 trillion.
Recent developments reveal that Broadcom and Taiwan Semiconductor Manufacturing Company (TSMC) are contemplating a strategic move to dismantle Intel’s struggling operations. Broadcom is particularly focused on acquiring Intel’s chip design and marketing business. However, the potential acquisition hinges on Broadcom’s ability to partner with another entity willing to take over Intel's manufacturing assets. TSMC is also evaluating the possibility of taking control of some or all of Intel’s chip manufacturing facilities, potentially in collaboration with an investor consortium.
Discussions among the involved parties, including Broadcom, TSMC, and Intel, are reportedly in the preliminary stages and have not yet progressed beyond informal negotiations. Despite the initial talks, there is no formal proposal on the table, and the involved companies have not commented on these speculations.
In the broader context of chip manufacturing, companies like Google, Microsoft, Meta, and Amazon are increasingly utilizing custom-built application-specific integrated circuits (ASICs) to meet the rising demands for processing power and energy efficiency, making Broadcom a probable beneficiary of this trend. Analysts project that Broadcom's significant ASIC operations could see substantial growth as the company expands its collaborative efforts with industry leaders such as OpenAI and Arm.
Furthermore, analysts emphasize that should Broadcom secure these strategic partnerships and projects, it could potentially benefit from a substantial uptick in silicon wafer demand, presenting an opportunity worth $20 billion to $30 billion in revenue over the upcoming years. More specifically, cooperation on AI chip initiatives could significantly bolster Broadcom’s ambitions to achieve its forecasted serviceable market size of $60 billion to $90 billion by fiscal year 2027.
Additionally, investment disclosures indicate that major financial entities have shown greater confidence in Broadcom, with increased portfolio allocations to the company. Broadcom's participation in key areas of the tech ecosystem positions it favorably amid the ongoing technological advancements and consolidated focus on AI-driven innovation across numerous markets.
