Meta, formally known as Facebook, planned to use Broadcom’s custom chips to build Metaverse hardware, becoming the chipmakers’ next billion-dollar ASIC customer, JB Morgan’s analysts said on Tuesday.
ASIC (Application-specific integrated circuit) chips will generate $2 billion (roughly Rs. 15,519 crore) to $2.5 billion (approx. Rs. 19, 399 crores) in revenue for Broadcom this year, supported by its deal with Meta and partnership with Alphabet and Microsoft, the analyst added to the statement.
“We believe that these wins are primarily at 5 nanometers and 3 nanometers, respectively, and will be used to power Meta’s metaverse hardware architecture that it will deploy over the next few years”, analysts Harlan Sur stated.
Metaverse is the platform where people can interact, work and play. Meta is investing heavily in the Metaverse by adding new features to hardware devices that serve as access points to the virtual world.
Broadcom and Google have co-developed Google’s custom chip used for machine learning tasks, and the brokerage estimates this to be worth over $1.3 billion (approx. Rs 10,0887 crore) in 2022.
Meta is developing a range of hardware products for the Metaverse that include smart glasses and virtual reality headsets to improve the costumes experience. It has also invested in physical stores where shoppers can try out these devices and other gadgets.
“Near-term ASIC program pipeline is strong as we believe Broadcom will revamp Meta/Facebook and Microsoft ASICs this year,” Sur added to the statement.
Broadcom’s semiconductor solution, which makes custom chips, contributed over 70% to the company’s nearly $27.5 billion (roughly Rs. 2,134,26 crore) revenue in 2021.