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Facebook parent Meta to use Broadcom chips to build metaverse hardware 2022

Meta

The metaverse is the next evolution of social connection. Our company’s vision is to help bring the metaverse to life, so we are changing our name to reflect our commitment to this future. Facebook parent Meta Platforms Inc will use Broadcom Inc’s custom chips to build its metaverse hardware, becoming the chipmaker’s next billion-dollar ASIC customer, analysts at J.P. Morgan said on Tuesday.

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ASIC (application-specific integrated circuit) chips will drive $2 billion to $2.5 billion in revenue for Broadcom this year, helped by its deals with Meta and partnerships with Alphabet and Microsoft, the analysts said.

We believe these wins are primarily at 5 nanometre and 3 nanometre and will be used to power  metaverse hardware architecture that it will deploy over the next few years,” analyst Harlan Sur said.

Meta is investing heavily in the metaverse – a virtual space where people interact, work and play – by adding new features to hardware devices that serve as access points to the virtual world.

Sur added that will emerge as Broadcom’s next $1 billion-a-year ASIC customer over the next three to four years after Google. ASICs are designed to perform hyper-specific tasks, including in AI and machine learning, efficiently.

Broadcom and Google have co-developed Google’s custom chip used for machine learnings tasks since 2016 and the brokerage estimates this to be worth over $1.3 billion in 2022.

Meta is developing a range of hardware products for the metaverse that include smart glasses and virtual reality headsets, and has even opened its first physical store where shoppers can try out these devices and other gadgets.

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“Near-term ASIC program pipeline is strong as we believe Broadcom will be ramping Facebook and Microsoft ASICs this year,” Sur added.

Broadcom’s semiconductor solutions business, which makes custom chips, contributed more than 70% to the company’s nearly $27.5 billion revenue in 2021

“We believe these wins are primarily at 5 nanometre and 3 nanometre and will be used to power metaverse hardware architecture that it will deploy over the next few years,” analyst Harlan Sur said.

Investing heavily in the metaverse – a virtual space where people interact, work and play – by adding new features to hardware devices that serve as access points to the virtual world.

Sur added that will emerge as Broadcom’s next $1 billion-a-year ASIC customer over the next three to four years after Google. The devices, except for the Ray-Ban glasses, will be available for purchase at the store. The products can also be bought online through a new shopping tab on  the company said.

 Investing heavily in the verse – a virtual space where people interact, work and play – by adding new features to hardware devices that serve as access points to the virtual world.

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Earlier this month, the Facebook owner said it would start testing tools for selling digital assets and experiences within its virtual reality platform Horizon Worlds, a VR platform launched late last year.  also said it would charge a 47.5% fee from creators of digital experiences and assets, a move that has attracted criticism from some app developers

Shoppers tracking the space are awaiting the next version of the Quest 2 VR headset, likely to be released in the second quarter and widely seen by analysts as critical to the company’s plans.(This story corrects to show glasses produced with Ray-Ban are smart glasses, not augmented reality glasses, in paragraph 2).This will replace the company’s current ticker symbol ‘FB’, which has been used since its initial public offering in 2012. The new ticker symbol aligns with the company’s rebranding from Facebook. Back in October 2021, CEO Mark Zuckerberg introduced Meta which brings together various apps and technologies under one new company brand.  focus is to bring the metaverse to life and help people connect, find communities and grow businesses.

 

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