Broadcom

Broadcom CEO’s message to his employees before firing half

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Silicon Valley is immersed in a profound transformation in which it has happened to have offices full of slidesarcade machines and free food at all hours, to force their engineers to work 92 hour work week and fire them when the financial results are not what investors expected. In this transformation, an executive has emerged as an example of efficiency for the elite of Silicon Valley startup founders and CEOs: Hock Tan, CEO of Broadcom. Hock Tan and efficiency capitalism. As and how did he count The InformationBroadcom has radically changed its strategy under Hock Tan. According to Kenneth Hao, Silver Lake CEO and director of Broadcom, Tan’s management success comes from his “focus on basic principles that do not come from conventional wisdom. Not copying others.” His management has become synonymous with extreme efficiency and obsession with profitabilityto the point of eliminating any company welfare policy if it does not provide financial value to the company. The most notable example is what happened after the acquisition of VMware in late 2023. The first meeting already set the tone. Just as I collected The Information in his article, shortly after close the purchase of VMware for about $69 billion in December 2023, Tan organized a meeting with his new employees to explain his plans. When asked if they would maintain staff benefits offered by VMWare, such as daycare, couples therapy services, wellness bonuses of up to $1,000, or all-day coffee and meal service, Tan responded bluntly: “Why would I do something like that? I’m not your dad.” That response was not a simple comment, it was the first warning that the management philosophy was going to completely change under Broadcom. Layoffs and downsizing. Just like collected Business Insiderthe cuts began almost immediately. In the first days after the acquisition, about 1,300 workers were laid off in California alone, and over time VMware’s workforce went from about 38,000 initial people to about 16,000 employees. Broadcom has defined these layoffs as part of its strategy to eliminate duplication, reduce intermediate layers and focus on the areas of greatest financial impact. Furthermore, among their demands was also that of return to the offices. Only the turtles were saved from the campus. A similar fate befell the VMware campus in Palo Alto, a space famous for its gardens, open areas, ponds with turtles, outdoor amphitheaters and services designed for the daily well-being of employees. After the arrival of Broadcom, most of those spaces disappeared. Of the 18 buildings that made up it, all but five were sold, all garden surfaces, all additional services and even cafeterias were eliminated. Tan has skyrocketed profitability…and his bonus. After the purchase of VMWare, Broadcom’s revenues skyrocketed because the reorganization was not limited to personnel. Broadcom too modified the product catalog and VMware prices, which is reflected in an increase in 20% on company income. Since 2018, Broadcom’s share price has increased by 1,800%. This commitment to efficiency in its annual turnover has a very well-defined reason for Tan. Its good financial results have led it to achieve some of the biggest bonuses that have been paid to a CEO, receiving 161.74 million dollars in 2023. In September, the board of directors In addition, part of Tan’s salary is given in the form of shareswith which the manager already accumulates more than 1.2 million shares of Broadcom with a value of approximately 492 million dollars. In Xataka | We knew that the CEOs of large companies were very well paid. What we didn’t know was how much their salary had been raised. Image | VMware, Wikimedia Commons (Greg Bezat)

There is a mystery customer spending 10 billion on Broadcom chips. Nobody knows who he is and that should worry us

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Charlie Kawwas, president of semiconductors at Broadcom, confirmed yesterday that OpenAI is not the mysterious client who signed up to pay $10 billion in custom chips. In September the existence of that enigmatic client became known and there was unanimity assuming that it would be OpenAI. But it turns out it’s not OpenAI. “I would love to receive a purchase order for 10 billion from my good friend Greg,” Kawwas said. referring to Greg Brockman, president of OpenAI. “He hasn’t given it to me yet.” Why is it important. During the Cold War, nuclear installations could be counted from satellites. In the AI ​​race, someone may be building the computational equivalent of a nuclear arsenal and we have no way of knowing. AI chips are the new strategic weapons. And unlike enriched uranium, they travel discreetly in commercial containers. An entity with $10 billion to spend on custom semiconductors is building AI capability on a beastly scale. The candidates. The analysis rules out the usual suspects: Meta and Google They are already known Broadcom customers. amazon has its own chip strategy with AWS. Microsoft invest through your partner-friend-enemy OpenAI. More disturbing options remain: Gulf sovereign wealth funds with technological ambitions. Government entities Americans (NSA, classified projects). Chinese actors operating through intermediaries. Apple preparing a major play in AI. This last option would be the canary in the mine to anticipate Apple’s total immersion in AI, but the parakeet Gurman has not anticipated anything, so it sounds like a very remote option. The money trail. Broadcom does not announce the arrival of these types of customers by chance. In September, CEO Hock Tan mentioned this $10 billion order because it completely changed the company’s revenue projections for 2025. Broadcom shares are up more than 53% so far this year. And in 2024 they will already double their value. The market always values ​​these secret contracts even if it does not know who signs the check. In perspective. Opacity in AI infrastructure investments has become the norm. Companies treat their component strategies as classified information. OpenAI just announced 33 gigawatts of computing capacity between agreements with NVIDIA, AMD and Broadcom. One gigawatt can cost $50 billion. The figures are stratospheric, but at least we know who signs them. The alarm signal. When $10 billion in critical technology changes hands without identification, we have a problem because computational training capacity, in the age of AI, is geopolitical power. This case is also a message about the immediate future: the next technological revolution may be developing outside of any public scrutiny. Featured image | Xataka In Xataka | Broadcom is the other NVIDIA: it enters the select group of billion dollars and does not stop growing thanks to AI

OpenAI, Broadcom and TSMC want to end their XPUS

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Openai wants to hit the table in the race to dominate artificial intelligence. At the beginning of September we knew that “a mysterious client” made an investment in Broadcom of 10,000 million dollars for the design of AI chips. Through sources close to the company, we learned that it was OpenAI, with the intention of form a strategic alliance with both Broadcom and TSMC for the manufacture of own chips. Called ‘Xpus’, they have a clear objective: stop depending on Nvidia, something that Many great technology want. Have independence in AI is paid expensive. For Openai, depending completely on Nvidia to feed chatgpt and its future models is a capital risk, especially for having to deal with astronomical costs, and being limited to the technological evolution and stock of a company like NVIDIA. Creating your own chips allows OpenAI to optimize hardware specifically for your language models, reduce operating expenses and free yourself from the bonds of a single supplier. A strategy on the Apple line when He said goodbye to Intel to start making their own chips in their Mac. Although stop depending on Nvidia today is complicated. The golden trio behind the XPUS. Broadcom Lead the design Of these specialized processors, contributing their experience in custom chips for technological giants. The company controls approximately 70% of the Custom IA processors market and has already collaborated with Google in His tpus For years. TSMC, the world’s largest semiconductor manufacturer, will be responsible for producing chips using their advanced 3 nanometers technology. Mass production would predictably start in 2026with the first shipments arriving that same year. What are exactly the Xpus. These chips are not adapted gpus for AI, which is what is broadly marketing nvidia, but architectures designed from scratch With a single purpose: accelerate language models. While the NVIDIA GPUSs were born to rendering graphics and then adapted to artificial intelligence, OpenAi XPUS are specifically conceived for training and inference tasks of AI. They incorporate systemic matrices, high bandwidth (HBM) and integrated network capabilities, similar to the most advanced NVIDIA processors but optimized for the specific needs of OpenAI. The rebellion against Nvidia has several fronts. Openai is not alone in his efforts to break the hegemony of Nvidia. Google has been developing its TPUS (Tensioner Processing Units), which already go for its seventh generation. Amazon created its chips Trainium and Inferentia For AWS. Microsoft designed Maia For Azure. Goal collaborates with AMD In alternative solutions. Even from China, Huawei threatens face face In the next three years. It is clear that all large technological ones want to have greater control of their products, and for that they must go down to the chip supply chain to start rethinking the scheme. Nvidia’s real pit. Despite how the panorama is, Nvidia preserves An ace in the manga That will not be easy to overcome: CUDA. This development platform has become the industry standard for more than a decade. Virtually all the researchers and developers of the CUDA program, which generates a very powerful network effect. Changing to a different architecture not only implies acquiring new chips, but rewriting software, removing equipment and, in many cases, starting from scratch. This technology is the one that keeps Nvidia in a privileged position even before the avalanche of competitors. A dual strategy. The paradoxical of the case is that Openai is not abandoning Nvidia. Parallel to this own chips project, the company maintains An agreement of 100,000 million dollars With the Santa Clara giant for its Stargate project, which plans to build huge data centers until 2028. On the one hand, the calculation power supply with NVIDIA is ensured, while on the other they develop their long -term alternative. The idea is that XPUS are initially used internally, especially for inference (apply already trained models), while NVIDIA GPUS will continue to be necessary for training the most demanding models. The board is removed. Broadcom is clearly reinforced from this movement. The announcement of your agreement with Openai He shot his actions In the stock market and consolidate its position as a preferential partner for companies that seek custom chips. TSMC also wins: each new wave of specialized chips reinforces its indispensable role as a world reference manufacturer. Nvidia, on the other hand, saw his price slightly fall after knowing the news, although he continues to maintain A dominant position Very difficult to collapse. In addition, AMD could benefit if smaller companies, unable to develop their own chips, look for more accessible alternatives than NVIDIA. Cover image | NVIDIA, VECTEEZY, Village Global In Xataka | The companies of AI tell us that they want to achieve an AGI. What they are really conquering is the economy of attention

The loss of the Broadcom chips factory is a malazo for Spain. Now you have to trust everything to your plan B

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For Spain lose the packaging plant Integrated circuits that Broadcom was going to build on Spanish soil is a real maza. And it is for several reasons of weight. The most obvious is that the presence of a factory of this American company would place the country on the European map of The production of advanced substrates. And, in addition, presumably would generate high qualification jobs, would develop the technological ecosystem of the area in which new investment would finally be installed and attracted. As we explain yesterday, this project finally It will not come to fruition. The leaks ensure that the negotiation held by the Spanish government and the Broadcom directive since July 2023 entered a man -dead point several months ago. There is no doubt that it was a very interesting plan for Spain, but, fortunately, it is not the only project that seeks to develop the local semiconductor industry and increase the relevance of Spanish companies in the global market of integrated circuits. These projects give Spain the opportunity to grow in the chips industry The installation that we can see in the cover photography of this article is the authentic protagonist of one of the most important projects that Spain is developing in the sector that concerns us: INNOFAB. The image building is the Alba synestron, which is housed in the Catalan town of Cerdanyola del Vallès, just 6 km from the center of Barcelona. And his role in the Innofab project will be crucial. An note before moving forward: a syncrotron is an electrons of circular electrons used to analyze atomic level the properties of matter, such as various types of materials, or even proteins. The Spanish institution that is involved in this Plan is the Barcelona Microelectronics Institute belonging to the CSIC (IMB-CNM-CSIC), a center that has a lot of experience in both microelectronics and in advanced techniques for integrated circuit manufacturing. INNOFAB will be a state -of -the -art semiconductor factory which will be housed next to the Alba syrrtron. It will cost approximately 392 million euros and will be financed with funds from the Next Generation Plan of the European Union, as well as with capital contributed by the governments of Spain and the Generalitat. Innofab’s construction works will begin soon with the purpose of the plant starting chips production in 2028 Construction works will begin soon with the purpose of the plant starting chips in 2028. This project is led by the Catalan Institute of Nanoscience and Nanotechnology, and will reside very close to the Autonomous University of Barcelona. Its purpose is to develop, as I have mentioned a few lines above, next -generation integrated circuits, but it will not be conventional chips; They will be semiconductors in which advanced materials, such as graphene, will be used to unmark silicon semiconductors whose production It is controlled by Asia and the USA. When the INNOFAB factory is ready, the ALBA particle accelerator will allow to analyze the candidate materials to be used in the production of semiconductors atomic. And also the properties of integrated avant -garde circuits. An important note is that Innofab will not produce chips in large quantities; Your role will be to develop advanced technologies which will then be commercially exploited in other plants. This role in a way justifies that its cost is somewhat less than 400 million euros. In any case, Innofab is not the only project dedicated to the chips that Spain is developing. The Godic plan It seeks to develop the necessary technologies to make possible the large -scale manufacture of polyristaline silicon carbide. This initiative is framed within the belonging of microelectronics and semiconductors (popularly known as the chip) and has a budget of 3.3 million euros to which the State contributes by assuming 68% of the total cost. It sounds good, but there is more than we should not overlook: the reason why this project is so important to Europe and Spain. The Godic plan seeks to develop the necessary technologies to make possible the large -scale manufacture of polyristaline silicon carbide The current situation of tension in geopolitical and geostrategic fields That they support the US and Europe on one side, and China to the other, it is promoting that the old continent is doing everything in its hand to reinforce its supply chain linked to the integrated circuit industry. Its purpose is put an end to its deep dependence of Asian suppliers in general, and of China in particular, so having a manufacturing plant of their own silicon carbide is crucial on the road to this objective. It is for Spain and also for Europe because it currently lacks this resource. The Diosic project began its journey at the end of 2023 and will last 26 months, so presumably the Spanish companies involved in it will conclude the development of innovations that are necessary to carry it forward in early 2026. Or, perhaps, if everything goes like silk, at the end of 2025. Anyway it is important that we do not overlook that beyond consolidating the independence of Spain and Europe Cost of the production of integrated circuits by 30%, and, at the same time, increase their yield by 35%. Before concluding this article, it is worth not overlooking another project that is also very important for Spain: the set -up The new European pilot line that pursues Lead the integration and encapsulation of components and electronic systems. The Spanish institution that is involved in this plan is the CSIC Barcelona Microelectronics Institute (IMB-CNM-CSIC), a center that has a lot of experience in both microelectronics and in advanced techniques for manufacturing integrated circuits. Any initiative that increases the competitiveness of Europe in a strategic industry such as semiconductors must be welcome “We intend to work on two approaches depending on whether the evacuation of high heat densities is required, as in the case of the ASIC, or if what is sought is a homogeneous distribution of temperature, more applicable to … Read more

Spain finally runs out of the Broadcom chips factory. This US company has broken with the government

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At the beginning of July 2023 Charlie Kawwas, the president of the Broadcom subsidiary specialized in the manufacture of semiconductors, announced that your company had reached an agreement with the Government of Spain to build An advanced integrated circuit factory on Spanish soil. Its budget touched the 1,000 million dollars (about 850 million euros), and although it never became completed its location for several months a filtration anticipated that this plant would stay in Zaragoza. According to Kawwas, these facilities were going to be specialized in Substrate manufacturing And they would help this American company reinforce its position in the semiconductor production market. For Spain, the construction of this factory was great news because it would place the country on the European map of The production of advanced substrates. And, in addition, presumably would generate high qualification jobs and develop the technological ecosystem of the area in which it finally be installed. Unfortunately this project will not come to fruition. Broadcom has back According to the Europa Press agencyBroadcom will finally not build its factory in Spain. The negotiation that this company maintained and the Spanish government has been broken, apparently. At the moment it has not transcended the reason why this project will not prosper, but according to Europa Press Donald Trump’s return To the White House has been able to exercise as a death sentence in a context in which the commercial relationship between the US and Europe goes through a very complicated moment. “That collapsed by Trump. It was a very interesting operation and in the end he did not curdle,” In fact, the arrival of Trump ended another project in which the Spanish government intended to invest 400 million euros to establish a company joint with an American company. Its purpose was also to build a chips manufacturing plant. “That collapsed by Trump. It was a very interesting operation and in the end it did not curdle. Right now there is a feeling that US companies are very restricted when investing in Europe, ” has declared One of the sources of Europa Press. It makes sense. The administration led by Trump pursues reinforce your local semiconductor industryso it is perfectly credible to be zancadilleando the plans of US companies that plan to invest outside the US. On the other hand, the construction of a avant -garde semiconductor manufacturing plant usually costs Between 20,000 and 30,000 million eurosso it is evident that the factory that Broadcom was going to be tuned in Spain was not going to be at all toe. Even so, it is a pity that this project has been frustrated. Image | Chris Hsia More information | Europa Press In Xataka | Chips manufacturers are coming from pearls to attract them. These are your reasons to come

Now it is more likely that Intel ends up chopped. TSMC and Broadcom are already rubbing their hands

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In the middle of last September, just two and a half months before leaving Intel, Pat Gelsinger revealed that the company’s board of directors was wearing the possibility of Escind your manufacturing business of semiconductors in A movement very similar to the AMD In 2009. This last company broke up its integrated circuit production subsidiary and created GlobalFoundries. Since then It has been objectively well. Intel pursues the same: recover financial health and increase its competitiveness. Gelsinger is already completely disconnected from Intel, but the possibility of separating the chips manufacturing subsidiary from the rest of the company is still on the table. However, like We explain to you At the end of November, if you finally decide to do so, you will not have complete freedom. And he will not have it because he has contracted obligations with the US government as a result of the reception of the 7,860 million dollars given by the Department of Commerce as a subsidy. And also of the 3.5 billion dollars which will receive from the Department of Defense to make chips for military applications. TSMC and Broadcom are interested in getting two essential parts of Intel Intel’s commitment to the US administration directly involves the splitting of its semiconductor manufacturing division in the form of an independent subsidiary. The US government has asked Intel to maintain the property of at least 50.1% of Intel Foundry if this business unit finally got to separate and acquire the form of a new private legal entity. And now more than ever this possibility is very tangible. TSMC is preparing an offer that would allow you to control the integrated circuit manufacturing plants of Intel According to The Wall Street Journal (TWSJ), which in the field of relations between companies does not usually give stitch without thread, TSMC and Broadcom are interested in getting two fundamental parts of Intel. The Taiwanese manufacturer of semiconductors, which leads the global market with A fee close to 60%you are preparing, always according to TWSJ, an offer that would allow you Control manufacturing plants Intel integrated circuits. At the current situation this strategic decision makes sense. TSMC is interested in developing its manufacturing infrastructure beyond Taiwan’s borders with the purpose of protecting its business if a war conflict between China and its country of origin is triggered. This company currently is building new plants of semiconductor production in Arizona (USA), Germany and Japan, but adding the factories that Intel has not only in the US, but also in Europe, Israel and Asia would allow him to consolidate his expansion very quickly. Interestingly in the middle of last October CC Wei, the current president and general director of TSMC, declared that he did not contemplate The possibility of buying Intel factories. However, it is reasonable that an executive with his responsibility Do not confirm an operation of this size until it is essentially closed. Whatever TSMC is not at all the only company that is interested in getting a piece of Intel. And is that, According to TWSJthe American chip designer Broadcom is also preparing an offer to get the integrated circuit design and marketing divisions of Intel. In any case, if the TSMC initiative will finally prosper will stumble in all likelihood with the government’s opposition led by Donald Trump. Currently it is unlikely that the administration approves the purchase of such an important division of an American company by a foreign company. Especially if, in addition, your business develops in a strategic industry such as semiconductors. Image | Intel More information | The Wall Street Journal In Xataka | Bill Gates has radiographed Intel. And his diagnosis is overwhelmingly accurate

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