Broadcom’s AI Chip Business Surges as Custom Silicon Demand Grows

AI Semiconductor Revenue Hits $16.7B

Broadcom’s AI semiconductor business is becoming a major growth engine for the chipmaker, with revenue reaching $16.7 billion in fiscal Q3 2026, up 221% from a year earlier and 54% from the previous quarter. Overall company revenue rose 86% year over year to $29.6 billion.

Broadcom said demand for custom AI accelerators and networking products remains strong, with six major XPU customers accelerating deployments. The company expects AI semiconductor revenue to reach $21.7 billion in Q4, representing 236% year-over-year growth.

Custom AI Chips Drive the Expansion

Unlike general-purpose GPUs, Broadcom's custom accelerators are designed around the requirements of individual AI companies. The company works with hyperscalers and AI labs to develop application-specific processors that can be used for training or inference.

Broadcom's latest results show how quickly that business is expanding. XPU shipments increased more than 3.5 times year over year during Q3 and accounted for 73% of the company's AI semiconductor revenue, according to CEO Hock Tan. Broadcom also reported that AI networking revenue more than doubled during the quarter.

Google, Anthropic and OpenAI Among Customers

Broadcom is supplying custom silicon to some of the world's largest AI infrastructure builders. Its work includes Google's TPU platform, Anthropic's AI compute infrastructure and OpenAI's first custom accelerator, known as Jalapeño.

The company said it delivered Google's Ironwood TPU in high volume to Google and Anthropic during Q3 and began production shipments of the next-generation TPU v8i to Google. It also shipped Jalapeño, OpenAI's first-generation custom accelerator, during the quarter.

The relationship with Anthropic is becoming particularly large. Reuters reported that Anthropic is expected to become Broadcom's largest customer in its chip-design business in 2027, while Broadcom has agreed to provide up to $42 billion in financing tied to Anthropic's infrastructure spending.

Broadcom Sees More Growth Ahead

Broadcom expects its AI semiconductor business to continue expanding as hyperscalers increasingly develop custom processors to supplement or reduce their reliance on general-purpose AI accelerators.

The company has projected approximately $115 billion in AI semiconductor revenue for fiscal 2027 and $230 billion for fiscal 2028. Those figures are forecasts rather than realised revenue, and they depend on continued demand and execution across Broadcom's customer programmes.

Broadcom is also expanding the networking infrastructure surrounding AI accelerators. Its portfolio includes high-bandwidth Ethernet switches, optical connectivity and AI networking components designed to connect large clusters of accelerators efficiently.

Custom Silicon Changes the AI Chip Race

Broadcom's growth illustrates how the AI semiconductor market is expanding beyond the traditional GPU competition. Large technology companies are increasingly developing chips tailored to their own workloads, particularly for inference, where performance, power consumption and cost can vary significantly by application.

That creates an opportunity for chip designers such as Broadcom to provide the engineering and manufacturing expertise required to turn a customer's architecture into production silicon. The company's latest results suggest that custom AI accelerators and the networking infrastructure around them are becoming increasingly important parts of the AI hardware market.