Broadcom has revealed new technology that will help ramp up the speed of semiconductors amid a surge in generative AI infrastructure requirements. The company released information that a custom chip division has created 3.5D XDSiP, which is an innovation targeted at raising the AI processors that are utilized by providers of clouds. This puts Broadcom squarely in the middle of the process of trying to address the demands of hyperscalers for high-performance AI silicon.
Broadcom Unveils Advanced Custom Chips to Power AI Revolution
Broadcom of Palo Alto, California, is among the biggest beneficiaries of the increasing demand for new chips for use in AI solutions. Broadcom’s custom chips offer nouveau hyperscalers an affordable supply chain option that is different from the sole reliance on Nvidia’s relatively pricey chips. If competition is increasing in the sector of AI hardware, then the innovation of Broadcom can produce it to dominate a large portion of the market.
The 3.5D XDSiP helps Broadcom’s customers pack more memory in each chip package and improve system performance. This is done through the utilization of sophisticated packaging that results in direct wiring of the critical components in ways that enhance the rates of working while lessening the degree of retardation. These augmentations are most important for the generative AI app categories that are highly computationally intensive.
For 3.5D XDSiP, Broadcom has to depend on TSMC for the implementation of CoWoS, which forms the core of Broadcom’s next-generation technology. However, CoWoS capacity at TSMC remains a limitation in the quantity of AI chips that can be produced, given the current industry limitation of CoWoS usage. The combination of Broadcom with TSMC is a good example of how design leaders and manufacturing champions need to come together to advance the state of the art in chips.
Since hyperscalers are continuing to build up more of AI architecture, Broadcom’s new technology is to feature prominently in speeding up the computations. The new development of the company cements the company firmly in the world of the artificial intelligence chip market as well as is indicative of the broader industry’s steps towards further development and expansion in order to meet the new level of demand for generative artificial intelligence solutions.
Broadcom’s Custom Chips for AI to Hit Market in 2026
Broadcom issued the information that it has five custom chip products in the pipeline with production shipment starting from February 2026. These chips, incorporating the company’s high-reaching 3.5D XDSiP technology, are intended to address the burgeoning need for artificial intelligence frameworks in hyperscale data centers. This is a big leap for Broadcom as it pushes forward its brand of AI-centric offerings.
However, Broadcom did not name which cloud companies are among its clients, although industry insiders are convinced that Google and Meta Platforms are among them. Currently, both companies are keen on increasing their AI capacity, and thus, they were in need of chips to support their increasing infrastructure demands. The partnership is hoped to help establish Broadcom as a major player in the field of AI hardware in the technology market.
Hock Tan, Broadcom’s chief executive, noted that hyperscalers are now building out new AI clusters to help drive emergent generative AI applications. In September, Tan also lifted the AI-associated revenue estimate for the company to $12 billion for FY24 from the prior estimate of $11 billion. This upward revision is owed to the increasing rate at which data centers are requiring AI hardware as the cloud providers scale up on computation power.
The five new products under development will use Broadcom’s sophisticated packaging technologies, including the key chip-on-wafer-on-substrate. They are intended to improve functionality and density as well as solve the requirements of the AI system loads associated with rapidly increasing requirements for high-speed processing and storing large volumes of data. Production shipments from 2026 would be the logical picture and are also the end product of all the years of research and development.
Since Broadcom is powering up for new custom chips, this company could easily become the dominant player in the swiftly expanding AI hardware sector. The upcoming products are anticipated to become a fundamental driver of the next generation of AI services whilst enhancing Broadcom’s position as a fundamental materials supplier to the biggest tech companies in the world.
Broadcom and Marvell Vie for $45 Billion Custom Chip Market
Broadcom's chief executive officer, Hock Tan, revealed that its custom processor unit has three significant clients as the company works to capitalize on the expanding trends in the market for unique chip solutions for data centers and artificial intelligence. Also, as a supplier of networking equipment, Broadcom is an essential provider for hyperscale cloud service providers who are increasing their AI capabilities.
The competition in this segment is intense, and Marvell Technology became the close competitor of Broadcom mainly. Marvell’s COO Chris Koopmans has estimated that this market for these custom chips could reach $45 billion by 2028, of which Marvell and Broadcom would account for almost all the business. This forecast demonstrates the great potential for both players given the growing role of specific hardware configurations among hyperscalers.
Some participants are hopeful when it comes to the market prospects. As for the custom chips, Kinngai Chan, a senior analyst at Summit Insights, added that there would be persisting requests for such products in the future due to the development of artificial intelligence or machine learning and cloud computing, among other things. These projections indicate that both Broadcom and Marvell stand in good stead to reap from this growth once they hone their products to suit the demands of the market.
Broadcom’s main drive is, therefore, the uniqueness of 3.5D packaging and a strong relationship with hyperscalers, while Marvell is centered on delivering top-performing and scalable solutions. This double domination in the custom chip market shows how unique processors play an increasingly important role in meeting the needs of the next-generation AI and data center.
This tendency may cause further evolution of the custom chip technology, and the competition between Broadcom and Marvell in the growing market may intensify. Currently, both these giants are set to continue leading future advancements in AI and the underlying cloud architecture while solidifying their dominance of the future specialist chip market.
