It’s Not Just Nvidia: Broadcom’s Surprise Earnings Lift Samsung and SK Hynix

Broadcom, the U.S. semiconductor company regarded alongside Nvidia Corporation as a key buyer of memory chips, has reported earnings that beat market expectations. Because Broadcom is seen as a leading indicator of demand for artificial intelligence (AI) memory, anticipation is growing that major suppliers Samsung Electronics and SK Hynix will benefit.
According to industry sources on the 6th, Broadcom announced on the 4th (local time) that revenue for its first fiscal quarter, from November last year to January this year, came to 19.31 billion dollars (about 28 trillion won). This was up 29% from a year earlier and marked a record high on a quarterly basis.
Notably, the semiconductor segment drove the results, generating 12.515 billion dollars, or about two-thirds of total sales. Within semiconductors, AI chip revenue reached 8.4 billion dollars, more than doubling year-on-year with growth of 106%.
Broadcom is a U.S. fabless company that designs network chips and application-specific integrated circuits (ASIC) for data centers. Recently, it has been rapidly expanding its presence in the AI market by handling the design of AI accelerators and AI networking chips for global big tech firms such as Google and Meta Platforms. Industry observers say the high-bandwidth memory (HBM) market is expanding on two pillars: Nvidia graphics processing units (GPUs), which have long dominated demand, and Broadcom’s ASIC products.
For this reason, Broadcom’s earnings are viewed as a leading indicator for the AI semiconductor market. Orders for AI chips from big tech companies first show up in Broadcom’s revenue, and then, as those chips are manufactured, demand for HBM and server DRAM rises in tandem.
Industry analysts interpret Broadcom’s sharp increase in AI semiconductor revenue as likely to translate into stronger memory sales for Samsung Electronics and SK Hynix. AI accelerators and networking chips require high-bandwidth memory (HBM) and server DRAM as essential components to process large volumes of data.
SK Hynix and Samsung Electronics are already key suppliers of HBM3E high-bandwidth memory (HBM3E) to Broadcom. With next-generation HBM4 high-bandwidth memory (HBM4) set to be adopted in the AI accelerator market starting this year, both companies are reportedly in ongoing talks with Broadcom about HBM4 supply as well.
Last month, Chey Tae-won, chairman of SK Group, personally visited Broadcom’s headquarters and met with Broadcom CEO Hock Tan to discuss stable supply plans for AI infrastructure, including HBM.
Growth in the ASIC market is expected to continue into the second quarter. Broadcom projected that it will maintain its growth trajectory and post revenue of 22 billion dollars (about 31.8 trillion won) in the second quarter, again exceeding the market consensus of 20.56 billion dollars. AI semiconductor sales are also expected to hit a new record high.
Broadcom CEO Hock Tan said, “First-quarter revenue reached an all-time high, driven by continued strength in our AI semiconductor solutions,” and added, “AI revenue growth is accelerating further, and we expect AI semiconductor sales to reach 10.7 billion dollars in the second quarter.”
one1@fnnews.com Jung Won-il Reporter