Broadcom has reportedly secured a significant order for high bandwidth memory (HBM) from South Korean memory manufacturer SK Hynix, indicating a strategic move within the landscape of artificial intelligence (AI) hardware. This order is anticipated to be integral to the development of AI equipment for at least one major cloud service provider (CSP). The actions of Broadcom and its influence on the market echo a broader trend among hyperscalers such as Google, Meta, and ByteDance to diversify their AI hardware supply chains, thereby reducing dependency on Nvidia, which has traditionally maintained a dominant position in the AI technology sector.

During a recent earnings conference call, Broadcom’s CEO Hock Tan outlined the company’s ambitions, noting that it has three hyperscale customers each planning to deploy one million XPU clusters by 2027. Tan further revealed that Broadcom is in advanced discussions with two additional hyperscalers regarding their own definitions of AI XPUs. Although Broadcom has not confirmed the identities of its hyperscale partnerships, industry speculation suggests that Google, Meta, ByteDance, and OpenAI may be among those collaborating on custom AI chips. There is also a perception that Broadcom is working with Apple to create the tech giant’s inaugural artificial intelligence server chip, referred to as “Baltra,” which would support advanced networking capabilities essential for AI processing.

The recent developments pose challenges for Nvidia. According to reports from TheElec, Broadcom actively sought SK Hynix to produce HBM for its tailored AI chips intended for a notable but undisclosed tech company. These sources indicate that Broadcom has successfully obtained a large HBM order with shipments expected to commence in the second half of 2025.

In response to Broadcom’s increased requirements, SK Hynix is reportedly adjusting its production capabilities. TheElec notes that the company plans to escalate its 1b DRAM wafer output—vital for HBM development—from 140,000 to 170,000 units in 2025. However, this expansion may impact the rollout timeline of SK Hynix’s next-generation 1c DRAM, as current production priorities take precedence.

As the landscape of AI hardware evolves and diversifies, the actions of companies like Broadcom and SK Hynix reflect significant shifts in business practices and supply chains within the technology sector.

Source: Noah Wire Services