Investment Rating - The report maintains an Overweight (OW) rating on Broadcom (AVGO) and Marvell (MRVL) [35][49]. Core Insights - The high-end custom ASIC chip market is projected to reach $30 billion by CY25, growing at a 30% CAGR, driven by the aggressive adoption of AI technologies [5][11]. - Broadcom and Marvell are positioned as market leaders, holding 55-60% and 15% market shares respectively, and are expected to dominate the ASIC market due to their strong design capabilities and extensive customer pipelines [8][11]. - The demand for custom ASICs is increasing as cloud/hyperscale companies seek differentiation, better performance, and lower costs compared to off-the-shelf solutions [9][11]. Summary by Sections Market Opportunity - The high-end ASIC market is estimated to be a $30 billion opportunity with a 30% CAGR, primarily fueled by the demand for AI compute accelerators [5][11]. - Custom AI ASICs are expected to account for 40% of the AI XPU/GPU market this year, indicating a significant shift towards custom solutions [19]. Company Performance - Broadcom is on track to generate approximately $19.5 billion in AI revenues this fiscal year, with expectations to exceed $31 billion next fiscal year, reflecting a 60% year-over-year growth [5][9]. - Marvell is ramping production of its first two AI ASIC programs and is projected to achieve $4 billion in AI revenue this year, up from $1.8 billion last year [10][11]. Design and Technology - Both Broadcom and Marvell possess advanced design capabilities, including the ability to handle complex chip designs with over 100 billion transistors, which is a key differentiator in the market [6][20]. - The emergence of custom ASICs is driving demand for EDA software and critical IP, benefiting companies like Synopsys, Cadence, and ARM [7][11]. Customer Engagement - Broadcom and Marvell have secured significant design wins with major cloud/hyperscale customers, ensuring a strong pipeline for future growth [23][32]. - The report highlights the collaborative nature of ASIC development, where cloud titans partner with semiconductor companies to leverage their design expertise and manufacturing capabilities [8][20].