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Google Discussed Dropping Broadcom as AI Chips Supplier

A smartphone with a displayed Broadcom logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
A smartphone with a displayed Broadcom logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
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Google Discussed Dropping Broadcom as AI Chips Supplier

A smartphone with a displayed Broadcom logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
A smartphone with a displayed Broadcom logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

Alphabet-owned Google has discussed dropping Broadcom as a supplier of artificial intelligence (AI) chips as early as 2027, The Information reported on Thursday, sending Broadcom shares down 5% in premarket trading.
If that happens, Google will design the chips - known as tensor processing units - in-house, the report said, adding that executives set a goal earlier this year to ditch Broadcom following a standoff between the companies over the price Broadcom was charging for the chips, Reuters said.
Broadcom CEO Hock Tan recently said that generative AI could account for more than 25% of the company's semiconductor revenue next year.
Google has intensified investments in generative AI this year as it plays catch-up after Microsoft-backed OpenAI's launch of ChatGPT last year took the tech world by storm.
The Information also said that Google has been working since last year to replace Broadcom with chipmaker Marvell Technology for an advanced chip internally code-named Granite Redux.
Google, Broadcom and Marvell didn't immediately respond to a Reuters request for comment.

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Samsung Electronics Changes Chip Chiefs after Chairman Lee Confronts ‘Crisis’

The company logo is displayed at the Samsung news conference at the Consumer Electronics Show (CES) in Las Vegas January 7, 2013. (Reuters)
The company logo is displayed at the Samsung news conference at the Consumer Electronics Show (CES) in Las Vegas January 7, 2013. (Reuters)
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Samsung Electronics Changes Chip Chiefs after Chairman Lee Confronts ‘Crisis’

The company logo is displayed at the Samsung news conference at the Consumer Electronics Show (CES) in Las Vegas January 7, 2013. (Reuters)
The company logo is displayed at the Samsung news conference at the Consumer Electronics Show (CES) in Las Vegas January 7, 2013. (Reuters)

Samsung Electronics sought to inject impetus into its memory and foundry chip units by appointing new leaders on Wednesday, as it scrambles to catch SK Hynix and Taiwan's TSMC in the booming AI chip market.

The world's biggest memory chipmaker reavowed its faith in semiconductor chief Jun Young-hyun by naming him co-CEO and bestowing direct control of its struggling memory chip business.

Samsung also made US chip head Han Jin-man president and head of its foundry business making customer-designed chips.

However, Samsung kept Chung Hyun-ho, second-in-command to Chairman Jay Y. Lee, as head of its Business Support Task Force and appointed a former CFO as Chung's deputy. That disappointed some analysts who argued for change among the biggest decision makers whose missteps they said made Samsung slow to embrace AI.

Samsung's share price closed down 3.4% as the reshuffle did little to calm concern about how the technology giant will navigate risk associated with the protectionist policies of US President-elect Donald Trump.

Even before Trump's election triumph, Samsung's stock had been falling due to investor concern that it lags rivals as supplier to leading AI chip designer Nvidia.

Chip chief Jun takes on direct oversight of the memory chip business having headed the overall semiconductor division since May in an appointment Samsung said would tackle a "chip crisis".

Profit in the division plunged 40% in the third quarter from the second, with Samsung saying AI chip business had suffered a delay with a "major" customer - with analysts naming Nvidia as the likely customer. Samsung has since said it has made headway.

The extra responsibility indicates "Samsung is backing Jun's strategy to regain its competitiveness," said KB Securities' head of research Jeff Kim.

Still, with Chung remaining head of the Business Support Task Force - widely regarded as Lee's de facto secretariat involved in key decision-making - there are questions as to whether the reshuffle will address concerns about leadership, said Park Ju-gun, head of corporate analysis firm Leaders Index.

Joining the Business Support Task Force is President and CFO Park Hark-kyu, with a new CFO yet to be announced.

As well as catching up in AI and stemming a stock price decline, management has to contend with slowing profit growth and intensifying competition from Chinese rivals.

"I am fully aware that there are grave concerns about the future of Samsung recently," Chairman Lee said this week during a final hearing of an accounting fraud trial where he is a defendant. He has denied wrongdoing.

Wednesday's appointments also included a new chief technology officer of the foundry business and an executive tasked with finding new growth areas.

Samsung said the reshuffle is aimed at overcoming business uncertainty, revamping its organization and raising the technological competitiveness of its chip business.