Broadcom is moving ahead with aggressive investment, including seeking a massive liability raise of up to $100 billion (about 138 trillion won) to handle the surge of artificial intelligence (AI) chip orders. It means demand is so strong that it is hard to keep up with the pace of procuring chips and infrastructure for clients through internal cash flow alone. Coupled with the limitations of a single TSMC supply chain, there is growing speculation that Samsung Electronics' foundry division could see a windfall.
◇ $100 billion liability raise, Samsung foundry seen as beneficiary
On the 25th, the industry said Broadcom is negotiating a liability raise of at least $60 billion and up to $100 billion to support the procurement of chip design and infrastructure resources to supply to AI corporations such as Anthropic and OpenAI. In this context, analysis is emerging that the likelihood of Samsung Electronics' foundry division, which has risen as a key partner, winning advanced process orders is increasing.
Broadcom's liability structure consists of about $30 billion in subordinated liabilities and $60 billion to $70 billion in senior secured liabilities. A plan for Broadcom to provide guarantees on part of the senior liabilities is also under discussion. Issuance is expected through a special-purpose vehicle (SPV), with Blackstone and Apollo Global Management among the lenders.
In April, Broadcom signed a long-term deal with Google to supply custom chips and components for next-generation AI racks through 2031. For Anthropic, it agreed to provide computing capacity of about 3.5 gigawatts (GW) based on Google's AI processors starting in 2027. As of the end of last year, the total order backlog was $162 billion, of which $73 billion was for AI chips, and executives said they would exhaust this within the next six quarters. That is a pace of converting more than $12 billion per quarter into revenue.
Broadcom's AI Semiconductor sales in the second quarter of this year were $10.8 billion, up 143% from a year earlier, and third-quarter guidance rose further to $16 billion (up 200% year over year).
◇ "TSMC bottlenecks raise the possibility of more 2nm orders for Samsung"
The industry view is that it is structurally difficult for a single foundry (contract chip manufacturer) to handle all of this volume at one site. In fact, in a Reuters interview in March, Broadcom publicly pointed to supply bottlenecks, saying, "TSMC's production capacity is no longer unlimited."
After that, in July this year, Broadcom signed a $200 billion (about 292 trillion won) integrated memorandum of understanding (MOU) with Samsung Electronics covering memory, foundry and packaging. It will apply sub-2-nanometer (nm) processes to Broadcom's next-generation communications chip (WBC) and also receive HBM4 (sixth-generation HBM) and HBM4E (seventh-generation HBM). On the 30th of last month, during its second-quarter earnings conference call, Samsung Electronics said, "We are discussing next-generation projects with key customers such as Broadcom," and projected that this year's 2nm order tasks would more than double from a year earlier.
A semiconductor industry source said, "The fact that Broadcom has to pull in funds to support clients' infrastructure build-outs shows that securing foundry capacity has become the real bottleneck to sales growth," and added, "Since it will be hard for TSMC alone to absorb all this volume, there is a possibility that Samsung Electronics' 2nm line will ramp earlier than expected."