(Reuters) – Facebook parent Meta Platforms Inc will use Broadcom Inc’s custom chips to build its metaverse hardware, becoming the chipmaker’s next billion-dollar ASIC customer, analysts at J.P. Morgan said on Tuesday.
ASIC (application-specific integrated circuit) chips will drive $2 billion to $2.5 billion in revenue for Broadcom this year, helped by its deals with Meta and partnerships with Alphabet and Microsoft, the analysts said.
“We believe these wins are primarily at 5 nanometre and 3 nanometre and will be used to power Meta’s metaverse hardware architecture that it will deploy over the next few years,” analyst Harlan Sur said.
Sur added that Meta will emerge as Broadcom’s next $1 billion-a-year ASIC customer over the next three to four years after Google.
Broadcom and Google have co-developed Google’s custom chip used for machine learnings tasks since 2016 and the brokerage estimates this to be worth over $1.3 billion in 2022.
Meta is developing a range of hardware products for the metaverse that include smart glasses and virtual reality headsets, and has even opened its first physical store where shoppers can try out these devices and other gadgets.
Broadcom’s semiconductor solutions business, which makes custom chips, contributed more than 70% to the company’s nearly $27.5 billion revenue in 2021.
(Reporting by Aniruddha Ghosh in Bengaluru; Editing by Maju Samuel)