Broadcom shares fell 5% after Google expanded its custom chip deal with Marvell. Broadcom still has an April agreement with Google for future TPU generations.
The Apple precedent shows such transitions are slow and partial.
Broadcom's AI revenue will settle the question.
What happened
Marvell Technology disclosed an expanded custom chip agreement with Google on Aug. 19, including a warrant tied to up to $120 billion of future purchases. Broadcom, which designs Google's TPU chips, saw its shares fall about 5% that morning.
Why it matters
Google is arguably Broadcom's most important customer in its custom AI chip business, and it is deepening ties with Broadcom's direct rival. However, Broadcom itself announced in April a new long-term agreement to develop Google's future TPU generations, plus a deal to supply AI rack components through as late as 2031.
What to watch
Broadcom's AI semiconductor revenue reached $10.8 billion in its fiscal second quarter, up 143% year over year. Management guided for $16.0 billion in the fiscal third quarter, up more than 200%. The stock trades near $362, about 27% below its 52-week high, at roughly 60 times earnings.
Ask the AI about this article →
The market's reaction to the Google-Marvell agreement mirrors a familiar pattern for Broadcom. In January 2023, a Bloomberg report said Apple would drop Broadcom's combination chip for Wi-Fi and Bluetooth by 2025. The displacement happened — Apple introduced its own N1 wireless chip in September 2025 — but it did not end the relationship. Four months after the report, Apple signed a separate multiyear, multibillion-dollar deal for 5G components, and last month Broadcom extended that chip supply relationship through 2031. Broadcom's revenue nearly doubled as AI demand overwhelmed everything else, and the stock rose more than 500% from the split-adjusted $57.69 it closed at on the day of the report.
The current situation differs in one key way. The Apple risk sat in wireless components, a mature side business. Google sits inside Broadcom's AI franchise itself. Broadcom's AI semiconductor revenue reached $10.8 billion in its fiscal second quarter, up 143% year over year, on total revenue of $22.2 billion, and management guided for $16.0 billion in the next quarter. Top five customers accounted for about 40% of total net revenue in fiscal 2025. The Marvell vesting schedule stretches to January 2033, and the agreement describes chip programs built for the TPU ecosystem, not a wholesale replacement. The article argues the Aug. 19 drop does not prove damage, and the April agreement does not prove there is none — what settles it is Broadcom's AI revenue in the quarters ahead.
AI-summarized, only the topics you pick — one digest a day via Email, Slack, or Discord.
Free · takes 30 seconds · unsubscribe anytime
Ask AI anything about this article. Q&As are published on this page for other readers too.
SK Hynix is pushing beyond HBM (high-bandwidth memory, a key component in AI chips) to two new areas: HBF and…
Nvidia is reportedly in discussions to invest in AI startup Perplexity as part of a funding round that would v…
ITmedia's ICT Research Division tested ChatGPT, Gemini, and Claude Sonnet 5 in July 2026
Anthropic's Claude AI service is currently experiencing an outage, as indicated by the article title
Taiwan prosecutors indicted nine people, including employees of Nvidia and Super Micro, for allegedly exportin…
Snowflake CoCo now offers per-user AI credit quotas that are generally available, and introduced three new gov…
