Samsung Electronics Co. Ltd. (OTC:SSNLF) said Saturday it signed a memorandum of understanding with Broadcom (NASDAQ:AVGO) to expand cooperation in memory chips, contract manufacturing and advanced packaging, a partnership projected to exceed $200 billion through 2030.
Custom AI Chips Drive Deal
The five-year agreement combines Broadcom’s expertise in designing application-specific integrated circuits with Samsung’s chip manufacturing capabilities. Under the deal, Broadcom’s next-generation communication chips will be produced using Samsung’s sub-2-nanometer process technology, according to Samsung. The two companies will also work together to develop advanced high-bandwidth memory technologies, including HBM4E and HBM5.
Foundry Race Heats Up
Samsung said in a statement, “The expanded collaboration … reflects Samsung’s focus on supporting customers with end-to-end semiconductor technologies across an increasingly diverse range of AI and high-performance computing applications.”
Benzinga’s Take: Long-term production commitments from Broadcom could increase the use of Samsung’s advanced manufacturing facilities, helping the company strengthen its position in the competition to supply AI chips.
The deal follows Samsung’s $16.5 billion contract last year to produce logic chips for Tesla Inc. (NASDAQ:TSLA), as Samsung works to narrow the gap with foundry leader Taiwan Semiconductor Manufacturing Co (NYSE:TSM).
The AI chip push comes as Samsung’s chip division posted record first-quarter operating profit of 53.7 trillion won, roughly 94% of total company profit, even as it trims jobs elsewhere in its U.S. operations.
Benzinga’s Edge Stock Rankings indicate SSNLF stock has a positive price trend across all time frames.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
Login to comment