Broadcom TPU v9 Progressing Smoothly, Securing Next Four Generations of Google Orders

Overview

This report aims to clarify market rumors regarding potential delays or cancellation of Broadcom's next-generation TPU v9 project with Google. Through recent primary research, J.P. Morgan confirms that Broadcom's TPU v9 2nm ASIC project is progressing on schedule and is expected to enter mass production in 2028. The report emphasizes that, leveraging a five-year agreement signed with Google, Broadcom has secured design orders for the next four TPU generations (v8-v11) and sustained revenue growth. Given Broadcom's significant lead in advanced chip design and packaging, the firm reiterates its 'Overweight' rating and recommends active buying at current levels.

Core views

Addressing market noise, the research report explicitly states that Broadcom's TPU v9 2nm project (comprising 4 compute dies, 16 HBM stacks, and 400Gbps SERDES) is progressing smoothly. IP design for this project began in H1 last year, and SoC design started in H2 last year; it is currently one of Broadcom's highest-priority projects, with early v10 IP design already underway. In contrast, Google's internal COT team is still optimizing its current-generation product, 'Zebrafish.' Broadcom holds a lead of over 18 months in this domain, a gap that is difficult to close in the short term. Commercially, the five-year Google-Broadcom agreement signed in March of this year is pivotal. This agreement not only secures Broadcom's design win status for the next four TPU generations (v8, v9, v10, v11) but also includes Google's commitment to逐年 increasing TPU revenue through 2031. Additionally, Broadcom will commence production at its advanced substrate facility in Singapore in August and rapidly achieve 2.5D/3.5D advanced packaging capabilities supporting 15x reticle limit logic die area by 2028. Regarding performance expectations, Broadcom's ASIC XPU design win pipeline is the largest globally, covering leading global model builders such as Google, Anthropic, OpenAI, and Meta. The report forecasts that Broadcom's team will drive 2-2.5x YoY growth in AI revenue in 2027, followed by another doubling in 2028. The market continues to underestimate Broadcom's significant dominance in chip/advanced packaging design leadership, aggressive new design cadence, IP portfolio, and execution track record.

Analysis framework

The firm employs an analytical approach combining primary research validation with competitive benchmarking. First, negative rumors from the supply chain and media regarding project delays were refuted through direct research, confirming the technical roadmap timeline. Second, by comparing the progress of current-generation products between Broadcom and Google's internal team (COT), the magnitude of Broadcom's technical lead (18+ months) was quantified, thereby demonstrating the depth of its moat. Finally, combining the legal enforceability of long-term supply agreements with capacity expansion plans, future revenue visibility and growth potential were derived to support valuation and price targets.

Methodology notes

• Competition & Strategy FrameworkMoat / competitive advantage

  Technology Lead Time as Competitive Barrier

  The report quantifies Broadcom's technological moat by comparing the time lag (18+ months) in product iteration between Broadcom and competitors (Google's internal team), illustrating that rivals face difficulties catching up in the short term.

• Industry Analysis FrameworkSupply Chain Transmission

  Impact of Long-Term Supply Agreements on Revenue Visibility

  Analyzes how long-term lock-in agreements signed between upstream chip design firms (Broadcom) and downstream key customers (Google) translate into deterministic revenue growth and profit assurance over multiple future years.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Broadcom Inc. (AVGO.US)

  Core beneficiary; as Google's primary TPU design partner, securing orders for the next four generations.

  Strengths

  Possesses a technological lead of over 18 months, strong IP portfolio and advanced packaging capabilities, with a solid execution track record.

  Comparison

  Compared to projects involving Google's internal team (COT) and MediaTek, Broadcom offers greater certainty in yield, reliability, and design schedule.

  Risks

  Unexpected downturn in global economy or regional end-market demand.

Key data

• Target Price$580.00Based on 23x P/E multiple applied to FY2027E EPS of $25.35
• TPU v9 Mass Production Timeline2028 (CY28)No delays, no cancellations
• Technological Lead18 Months+Vs. Google's internal COT team
• AI Revenue Growth Forecast+2-2.5x YoY in 2027; +2x again in 2028Based on ASIC XPU project pipeline
• Agreement CoverageFour TPU Generations (v8, v9, v10, v11)Revenue commitment through 2031

Impact & implications

The report suggests a cognitive bias in the market regarding Broadcom's dominance in AI infrastructure. With the smooth progression of the TPU v9 project and the rollout of advanced packaging capacity, Broadcom will further consolidate its share in the AI chip market. For investors, the current stock price does not fully reflect the explosive growth potential of AI revenue over the next two years nor the long-term certainty of returns tied to Google, thus offering significant allocation value.

Risks

• Unexpected negative shocks to the global economy or any regional end-markets leading to changes in demand for Broadcom products.

What to watch

• Production ramp-up status of the TPU v9 2nm ASIC project in 2028.
• Progress on the rollout of Broadcom's Singapore advanced substrate facility and 2.5D/3.5D advanced packaging capacity.
• Actual progress by Google's internal COT team in narrowing the technology gap with Broadcom.