Google's Chip Deal Sparks Broadcom Sell-Off, But History Suggests Slower Transition

Broadcom's shares fell about 5% on August 19 after Marvell Technology announced an expanded custom chip agreement with Google, whose TPU chips Broadcom designs.

This is not the first time Broadcom has faced a design-away scare. In January 2023, Bloomberg reported that Apple planned to drop a key Broadcom chip by 2025 and use its own in-house design instead.

Apple accounted for about 20% of Broadcom's net revenue at the time, roughly $7 billion per year. However, losing one chip didn't mean losing the customer, Apple signed a separate multiyear deal with Broadcom to continue building 5G radio-frequency components, including filters, in the U.S.

Broadcom's revenue nearly doubled from fiscal 2023 to fiscal 2025 as AI demand overwhelmed other businesses. The stock closed at $57.69 on the day the Bloomberg report ran and now trades near $362, up more than 500%.