Samsung and Broadcom Sign $200 Billion AI Chip Deal Through 2030

Samsung and Broadcom signed a memorandum of understanding on Saturday to expand their partnership across memory chips, contract manufacturing, and advanced packaging. The agreement is expected to exceed $200 billion over the next five years, running through 2030.

The signing took place at an AI summit held at The Midway in San Francisco.

South Korean President Lee Jae Myung hosted the event, which brought together executives from both companies and South Korean government representatives.

The deal covers three main layers of the semiconductor supply chain.

Samsung will supply Broadcom with high-bandwidth memory, including HBM4 and HBM4E chips.

Broadcom uses these memory chips in its custom AI accelerators.

Samsung will also manufacture Broadcom's chips using its 2-nanometer and smaller process technologies. Production is scheduled for Samsung's manufacturing campus in Pyeongtaek, South Korea. The production lines will build Broadcom products, including Wireless Broadband Communications solutions.

The third element of the agreement involves advanced packaging. The two companies will work on packaging technologies based on Samsung's 2nm process, specifically 2.3D and 2.5D integration. These methods combine memory and logic components physically closer together. This design approach improves the performance and power efficiency of AI and networking silicon.

Broadcom designs custom AI chips for companies like Google and Meta. The company currently relies heavily on Taiwan Semiconductor Manufacturing Co. (TSMC), which controls over 90 percent of the top-tier chip production market.

Splitting manufacturing orders with Samsung gives Broadcom an additional major supplier in its supply chain.

The agreement brings a large customer to Samsung's foundry division.

Samsung currently holds about a 7 percent global market share in contract chipmaking.

The company has faced production yield challenges on its 2-nanometer process. The production commitment from Broadcom will increase the utilization rates at Samsung's manufacturing facilities.

Executives from both companies addressed the collaboration during the summit.

"AI is driving unprecedented demand for tightly integrated semiconductor technologies spanning memory, logic and advanced packaging," said Young Hyun Jun, Vice Chairman and CEO of Samsung Electronics' Device Solutions Division.

"By expanding our collaboration with Broadcom across these critical technologies, we look forward to delivering greater value to customers while advancing the AI infrastructure of the future," added Young Hyun Jun.

"As AI infrastructure continues to scale, close collaboration across the semiconductor ecosystem becomes increasingly important," said Charlie Kawwas, President of Broadcom's Semiconductor Solutions Group.

"By combining Samsung's memory and foundry expertise with Broadcom's AI and connectivity leadership, we aim to continue to deliver technologies that power the next generation of AI infrastructure," stated Charlie Kawwas.

The Saturday signing happened alongside a larger set of semiconductor agreements between South Korean and American technology firms.

These combined deals totaled about $950 billion during the summit.

As part of these side agreements, SK Hynix signed memory partnerships worth $750 billion with Nvidia, and Anthropic signed supply agreements with both Samsung and SK Hynix.

The summit in San Francisco followed South Korea's $880 billion domestic investment plan announced in June. That government initiative directs Samsung and SK Hynix to build four new chip fabrication plants in the southwestern region of South Korea.

Samsung reported a record quarterly operating profit of 89 trillion won in its second quarter, driven entirely by demand for AI memory chips.