Broadcom Faces Supply Chain Challenges Amid Soaring AI Chip Demand

What Happened

Broadcom has emerged as a key player in the artificial intelligence hardware sector, with escalating demand for its custom chips powering the latest generation of AI products and data centers. The company, based in San Jose, supplies networking chips and infrastructure primarily to hyperscalers such as Google. However, despite robust sales growth, Broadcom faces limits due to supply chain bottlenecks and dependency on a small pool of tech giants. The surge in AI adoption is pushing Broadcom’s operational capacity but also exposing vulnerabilities in its procurement and production pipelines. Analysts warn that while the AI-driven market opportunity is large, Broadcom’s overreliance on a few major customers could be a long-term risk.

Why It Matters

Broadcom’s success highlights the critical role of advanced chips and network hardware in powering AI expansion. Its experience illustrates broader industry challenges around supply chain resilience and diversification as AI scales across sectors. Read more in our AI News Hub