Broadcom, a U.S. semiconductor company, closed 2.56% higher at $358.39 on the 10th (local time) on the U.S. stock market. The market capitalization was close to $1.7 trillion. Broadcom's stock price has risen 61% in the last six months, overtaking Meta for the sixth largest market capitalization in the U.S. and the second largest market capitalization among global semiconductor companies. Silicon Valley-based Marvell Technology has also been strong recently. The stock price has risen 44.5% over the past six months, shaking off the slump in the first half of this year. Broadcom and Marvell Technology were previously known as fabless semiconductor companies, but their stock prices have risen significantly recently as their capabilities as design houses have been highlighted.
Broadcom serves as a design house to help Google's own AI semiconductor, TPU, and Meta's MTIA design. OpenAI and Apple are also ASIC customers of Broadcom. Marvell Technology is a design partner that designs the ASIC of Amazon Web Services (AWS).
Recently, Taiwan fabless company MediaTek is also focusing on the role of ASIC design house. It beat Broadcom to become Meta's new ASIC partner.
The fact that fabless companies participate in ASICs of big tech as design houses shows the change in the semiconductor market. In the past, it was common for foundry to produce as designed by Fabless and for customers to mount the general-purpose semiconductor on their products.
Recently, however, customers who use these semiconductors are increasingly designing their own customized semiconductors and even owning intellectual property rights (IP). Samsung Electronics and Apple, which directly design and make chips for their smartphones, are representative.
In particular, big tech companies that purchase Nvidia's AI semiconductor graphics processing unit (GPU) the most are actively designing their own customized semiconductors. The design house business that helps them is growing as the demand to create ASICs instead of purchasing expensive Nvidia GPUs is growing. In the case of design houses, it is not just helping customers design, but it is highly profitable because it owns IP directly.
Qualcomm, a fabless company, has seen a 12.7% increase in its stock price in the last six months, which is much lower than Broadcom or Marvell Technology, which illustrates this market change.
In Korea, there is also Semi-Five, which is about to be listed as a company with enhanced design capabilities. Semi-Five is helping customers quickly mass-produce their own customized semiconductors by building their own IPs and automating the design process. Semi-Five also recorded 111.8 billion won in sales last year, five years after its foundation.
AG Land, which was listed in November 2023, and Samsung Electronics' flagship design house partners Gaon Chips and AD Technology are promising design houses in Korea. However, some say that Korean companies are still small and not profitable compared to large foreign semiconductor companies. This is because if Samsung Foundry's performance is bad due to its dependence on Samsung Foundry, its performance will deteriorate together.
"Korea does not have a large TSMC-centered semiconductor ecosystem like Taiwan," said Shim Seung-pil, CEO of Supergate, an AI semiconductor startup. "Instead, since memory semiconductors are strong, we need to find opportunities in the AI chip market based on memory semiconductors." In particular, with the introduction of HBM4, a high-bandwidth memory, the demand for customized HBMs is increasing, and the role of design houses in this market could grow.
Design House
It is a company that helps both fabless, which designs semiconductors and owns intellectual property rights (IP), and foundry, which produces semiconductors. It is also called Design Solution Partners (DSPs).
[Reporter Lee Deok-ju]
