AI Revenue Outlook and Supply Constraints
Q: How sustainable is the doubling of business next year, and what are the supply bottlenecks?
A: Hock Tan stated the outlook is conservative and based on secured supply, though they could ship more if deployment timelines allow. The guidance for $115 billion in 2027 and $230 billion in 2028 is carefully structured based on data center readiness and supply chain capacity.
Q: Any update on substrate or interposer supply, and is Singapore capacity being used?
A: Hock Tan confirmed that Singapore fab deployment for substrates begins in fiscal 2027, which will address a key bottleneck.
Q: Can you clarify the gigawatt numbers for Google versus Anthropic?
A: Hock Tan clarified that the 10 gigawatts figure refers specifically to Anthropic.
Networking and Tomahawk Adoption
Q: What is the update on Tomahawk 6 and 7 adoption and scale-out or scale-up networking?
A: Charlie Kawwas noted that Tomahawk 6 is a success across hyperscalers and is available in 100-gig and 200-gig versions. He added that Tomahawk Ultra is also seeing strong adoption for scale-up applications using low-latency Ethernet.
Gigawatt Deployment and Content Value
Q: Can you verify the gigawatt counts for 2027 and 2028 and the revenue per gigawatt calculations?
A: Hock Tan explained that the gigawatt numbers are a guide for deployment trajectory, but actual production depends on data center readiness. He noted that Broadcom expects to ship $350 billion in AI semiconductors over the next two years, and the revenue per gigawatt remains consistent as performance and power requirements scale.
Financing and Off-Balance Sheet Risk
Q: What is the update on off-balance sheet risk for backstop agreements and residual value?
A: Amie O'Toole stated there are no new announcements regarding residual value or backstops. She added that future financing will be evaluated on a case-by-case basis tailored to specific lab and investor needs.
Customer Strategy and Gross Margins
Q: Why aren't frontier labs taking more supply, how much is their silicon choice dictated by partners, and what is the impact on gross margins in 2027 and 2028?
A: Hock Tan explained that Broadcom supports these labs because they are becoming hyperscalers in their own right and need first-party compute. Amie O'Toole clarified that gross margin reflects product mix and memory content, but operating margin remains the focus due to operating leverage.
Networking Attach Rates
Q: What is the attach rate of Tomahawk Ultra to Broadcom ASICs?
A: Charlie Kawwas said that customers building XPUs are deploying both Tomahawk 6 and Tomahawk Ultra, as the Ethernet-based open standard allows for broad connectivity across XPU and GPU clusters.
Infrastructure Constraints
Q: To what degree is the outlook sensitized to land, power, and shell constraints?
A: Hock Tan stated that these constraints are a major factor in deployment timing, and Broadcom engages directly with customers to analyze their site readiness before finalizing forecasts.
Q: Will the 10 gigawatts for Anthropic and 5 for OpenAI in 2028 be financed through the XPV platform?
A: Hock Tan and Amie O'Toole explained that not every site will be the same, and financing will be evaluated case-by-case. They noted that Anthropic's credit profile may change post-IPO, and OpenAI's situation is different.
Supply Chain and Capacity Expansion
Q: Are land, power, and shell the largest constraints, and what about memory and substrates?
A: Hock Tan described it as a multidimensional problem involving land, power, shell, leading-edge silicon, substrates, and HBM memory, noting that each can become a bottleneck at different times.
Q: How does dollar per gigawatt improve with subsequent XPU generations, and is the CapEx increase for capacity?
A: Charlie Kawwas and Hock Tan explained that CapEx is increasing to expand capacity for EML, CW, and VCSEL factories in the U.S. and Singapore. They added that dollars per gigawatt are expected to remain in the $20 billion to $30 billion range as power per chip increases.
