Facebook Parent Meta to Use Broadcom Chips for Metaverse Hardware in a Billion-Dollar Deal: Report - world cultures

Facebook Parent Meta to Use Broadcom Chips for Metaverse Hardware in a Billion-Dollar Deal: Report

Analysts at JPMorgan said Tuesday that Facebook’s parent Meta Platforms will use dedicated Broadcom chips to build its metaverse hardware, becoming ASIC’s next billion dollar customer.

ASIC (Application-Specific Integrated Circuit) chips will bring in $2 billion (about Rs 15,519 crore) to $2.5 billion (about Rs 19,399 crore) in Broadcom revenue this year, aided by its deals with Meta and partnerships with Alphabet and Microsoft, analysts said. .

“We believe these gains are mainly at 5nm and 3nm and will be used to power the architecture of the Metaverse devices that it will deploy over the next few years,” said analyst Harlan Suhr.

Meta is investing heavily in the metaverse – a virtual space where people interact, work and play – by adding new features to devices that act as access points to the virtual world.

Suhr added that Meta will emerge as Broadcom’s next $1 billion (about Rs 7,760 crore) per year as an ASIC customer over the next three to four years after Google.

ASICs are designed to efficiently perform very specific tasks, including in artificial intelligence and machine learning.

Broadcom and Google have co-developed a custom Google chip used in machine learning tasks since 2016 and the brokerage estimates it will be worth more than $1.3 billion (about Rs 10,088 crore) in 2022.

Meta is developing a range of hardware products for the metaverse that include smart glasses and VR headsets, and has even opened its first physical store where shoppers can try out these and other gadgets.

“The pipeline for the ASIC program in the near term is strong because we believe Broadcom will increase Meta/Facebook and Microsoft ASICs this year,” Suhr added.

Broadcom’s semiconductor solutions business, which makes custom chips, contributed more than 70 per cent of the company’s $27.5 billion (about Rs 2,134,26 crore) revenue in 2021.

© Thomson Reuters 2022

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