Samsung Electronics Signs $200 Billion AI Chip Partnership with Broadcom

Samsung Electronics and AVGO signed a memorandum of understanding valued at more than $200 billion covering advanced memory and foundry manufacturing for AI semiconductors, the companies said July 24 at an AI summit in San Francisco. The five-year agreement runs through 2030 and centers on Samsung's 2-nanometer and below process technology being used to manufacture Broadcom's AI chips.

The partnership spans three areas: Samsung will supply Broadcom with next-generation HBM4 and HBM4E high-bandwidth memory for AI accelerators; Samsung's Pyeongtaek, South Korea campus will manufacture Broadcom's chips using 2-nanometer and below foundry processes; and the two companies will collaborate on advanced 2.3D and 2.5D packaging aimed at improving performance and energy efficiency in AI and networking silicon. The deal is reportedly part of a broader package of roughly $950 billion in semiconductor and AI infrastructure cooperation between South Korea and the US.

For Samsung, the agreement is a chance to narrow its foundry gap with TSMC by locking in a major customer at the leading edge of process technology, while for Broadcom it diversifies AI chip manufacturing beyond its existing foundry relationships. Investors will be watching execution at Pyeongtaek, HBM4 yield and supply ramp, and whether the tie-up helps Samsung win additional foundry customers as competition for AI chip capacity intensifies through the rest of the decade.