Samsung and Broadcom sign $200 billion chip deal covering memory, core and packaging

Samsung Electronics and Broadcom signed a memorandum of understanding worth more than $200 billion for memory chips, foundry production and advanced packaging of artificial intelligence semiconductors. The agreement, announced Friday at the AI ​​conference in San Francisco, runs for five years until 2030 and covers some of the most important layers of the AI ​​chip supply chain. It is one of the largest semiconductor partnerships ever disclosed, although as an MOU it represents a statement of intent rather than a binding contract.

On the memory side, Samsung will provide Broadcom with next-generation high-bandwidth memory, including HBM4 and HBM4E chips, for use in Broadcom’s AI accelerators. At the plant, Samsung will manufacture Broadcom products using two-nanometer technology and micro processes at its campus in Pyeongtaek, South Korea. Collaboration also extends to advanced integrations that tightly integrate memory and logic, a process that is increasingly central to squeezing more performance into AI silicon.

Broadcom builds custom AI chips for hyperscalers including Google, Meta and others that want silicon that fits their specific workloads rather than buying off-the-shelf GPUs from Nvidia. The company extended its AI chip partnership with Meta until 2029 in April, and CEO Hock Tan recently said rising AI revenue has made organic growth more attractive than acquisitions. By combining manufacturing with Samsung, Broadcom gains supply chain strength beyond its existing reliance on TSMC, which controls more than 90 percent of the world’s leading chip production.

For Samsung, the deal addresses a continuing credibility gap in its innovation business, where global market share has fallen to around seven percent while TSMC dominates. The company has struggled with yields on its two-nanometer process, but a $200 billion customer commitment from one of the industry’s biggest chip designers could change the equation for investors who once doubted whether Samsung could compete. Samsung posted a record quarterly operating profit of 89 billion won in Q2, driven almost entirely by demand for AI memory.

The signing took place alongside a comprehensive package of semiconductor agreements worth about $950 billion between South Korean and American companies, announced at an AI conference hosted by South Korean President Lee Jae Myung. SK Hynix has signed a $750 billion memory partnership with Nvidia and others, and Anthropic has signed supply agreements with both Samsung and SK Hynix. The summit followed Seoul’s 880 billion domestic investment plan unveiled in June, which committed Samsung and SK Hynix to building four new chip factories in the country’s southwest.