Broadcom (AVGO) Goldman Sachs Communacopia + Technology Conference 2024 summary

Financial and operational highlights

• AI business revenue outlook for 2024 increased from $7.5B to $12B, reflecting robust growth and strong customer demand.

• Non-AI business segments are showing early signs of recovery, with sequential revenue growth, especially in enterprise markets.

• Top four U.S. hyperscalers increased CapEx from $145B in 2023 to $202B in 2024, with most of the increase allocated to AI.

• AI business nearly tripled from 2023 to 2024, driven by custom XPU solutions and merchant networking silicon.

Strategic technology and IP approach

• Focus on building sustainable franchises with a 10-year strategic planning horizon, investing only in markets deemed sustainable.

• Central Engineering develops proprietary, differentiating IP, such as SerDes and memory, used across all divisions.

• Significant investment in R&D, often outpacing the combined investment of industry peers in key technology areas.

• Custom solutions enable lower die size, reduced power, and higher performance, especially for hyperscale customers.

Custom compute (XPU) and merchant silicon trends

• Custom XPUs now represent about two-thirds of the AI business, with merchant networking silicon making up the rest.

• Hyperscalers increasingly prefer custom XPUs for internal workloads to control costs, power, and performance.

• Platform approach enables rapid XPU development cycles, reducing time-to-market from three years to less than one.

• Custom XPUs deliver significant power savings and scalability compared to merchant solutions.