Samsung gets $200 billion to make chips for Broadcom

Here's another win for Samsung's semiconductor division. The company announced earlier today that it has signed a $200 billion deal to supply and produce advanced chips for US-based Broadcom until 2030.

The agreement covers the supply of memory chips as well as the production of Broadcom-designed chips on Samsung's 2nm process technology. The two companies will also collaborate on next-generation high-bandwidth memory products.

In addition to memory chips and semiconductor manufacturing, this $200 billion deal also covers advanced packaging. It will also cover process technologies below 2nm, which Samsung has already commercialized.

Memory chips will be supplied for Broadcom's next-generation AI accelerators. Advanced packaging technologies, including 2.3D and 2.5D, will play a significant role in this collaboration as they allow for higher-performance and more power efficiency in AI chips.

The 2nm semiconductor production collaboration will have Samsung manufacturing Broadcom-designed ASICs and other chips, including next-generation communications silicon that's designed for high-speed data transfer.

Samsung's foundry division has so far lagged behind TSMC which remains the undisputed leader in the contract chipmaking space.

However, the Korean giant's technological advancements in semiconductor manufacturing coupled with its ability to leverage its memory dominance have placed it in an enviable position to take full advantage of the AI buildout by being one of the very few companies that's effectively a one-stop-shop for AI semiconductor needs.