Broadcom, a supplier of semiconductor and infrastructure software solutions, is targeting revenue of $8.7 billion for the second quarter of its fiscal year 2023.
Broadcom is expecting that its increased investments in artificial intelligence spur demand for its chips used in data centers.
AI has emerged as a bright spot for chip firms such as Nvidia and Broadcom, due to the technology’s strong potential applications as illustrated by OpenAI’s chatbot ChatGPT, Reuters news report said.
Broadcom expects to see exponential rise in demand for its networking solutions from hyperscale customers who are looking to deploy artificial intelligence in their systems, Hock Tan, President and CEO of Broadcom, said in its earnings report.
“We are seeing some of these hyperscalers bringing on a sense of urgency and focus, and of course, spending to be up to speed, if not to be left behind, as we see the excitement, hype perhaps, in pushing applications and workloads in generative AI,” Hack Tan said.
Broadcom, which supplies chips used in data centers for networking and specialized chips that speed up AI work, expects networking revenue to grow 20 percent in the current quarter.
Broadcom said revenue grew 16 percent to $8.9 billion and adjusted EBITDA margin increased to 64 percent for its first quarter of fiscal year 2023, ended January 29, 2023.
Broadcom said it generated revenue of $7.107 billion, representing 80 percent of total revenue, from Semiconductor solutions business. Broadcom generated revenue of $1.808 billion, representing 20 percent of total sales, from Infrastructure software business.