U.S. semiconductor company Broadcom (AVGO) announced after market close on September 2 (local time) that it posted fiscal 2026 third-quarter (May–July) revenue of $29.59 billion and earnings per share of $3.32. While shares initially fell in after-hours trading as next-quarter revenue guidance came in slightly below market expectations, sentiment reversed during the subsequent earnings call when CEO Hock Tan delivered an aggressive AI revenue outlook.

Tan stated that the company has already secured sufficient volume to lift AI semiconductor revenue to $115 billion in fiscal 2027—double the current fiscal year’s guidance of $58 billion. He added that fiscal 2028 would see another doubling to $230 billion. He explained that the first-generation custom accelerator “Jalapeño,” already being supplied to OpenAI, outperforms Nvidia’s GB300 (Grace Blackwell Ultra) in power efficiency, latency, and throughput, and delivers performance comparable to Nvidia’s next-generation “Vera Rubin” platform in OpenAI’s actual production environments. He also noted that a third-generation XPU, the successor to Jalapeño, is being co-developed with OpenAI.

Fiscal YearAI Semiconductor Revenue GuidanceYear-over-YearBasisFY2026$58 billion-Sept. 2, 2026 earnings releaseFY2027$115 billion2xCEO Hock Tan earnings call remarksFY2028$230 billion2xCEO Hock Tan earnings call remarks

Table: Broadcom AI semiconductor revenue guidance trajectory (based on Sept. 2, 2026 earnings release and earnings call)

This earnings announcement is expected to serve as a catalyst for restoring global AI investment sentiment that had been shaken by surging Treasury yields and Middle East geopolitical risks. Broadcom supplies custom AI semiconductors (ASICs) and data center networking chips to big tech companies including Google and Meta, and is regarded as a core pillar of the AI infrastructure ecosystem alongside Nvidia, which dominates the general-purpose GPU market.

Ahead of the earnings release, the market had been focused on whether fiscal 2027 AI revenue guidance would be revised upward. JPMorgan projected that Broadcom’s AI revenue would surpass $56 billion in fiscal 2026 and reach $130 billion in fiscal 2027—well above the company’s own target of $100 billion—while maintaining a $580 price target.

Broadcom’s stock started the year around $350, climbed past $480 in early June, but subsequently corrected to $370 as doubts about the sustainability of AI investment spread. The strong demand outlook presented by the CEO during this earnings call is being interpreted as a signal that dispels those concerns. Nvidia had previously also indicated during its second-quarter earnings that AI semiconductor supply bottlenecks would persist through 2028.

Broadcom’s ASIC production expansion is drawing attention for its direct linkage to Korean semiconductor companies, given that it translates into increased demand for high-bandwidth memory (HBM) and advanced packaging. In July, South Korea’s Samsung Electronics (005930.KS) signed a strategic memorandum of understanding (MOU) with Broadcom to pursue cooperation totaling $200 billion over five years through 2030 in memory and foundry sectors. South Korea’s SK Hynix (000660.KS) has also been discussing ways to apply its HBM technology from the early stages of Broadcom’s chip design.

▲ Broadcom AI semiconductor business customer and partner structure: ASIC and networking chips are supplied to Google, Meta, and OpenAI, while expanding HBM and packaging demand leads to partnerships with Samsung Electronics and SK Hynix.

Meanwhile, U.S. Commerce Secretary Howard Lutnick directly referenced Samsung Electronics and SK Hynix in an interview with Bloomberg, pressuring them to expand production facilities in the United States. He stated that the goal is to raise the U.S. share of semiconductor production from roughly 1% at the start of the Trump administration to 40–50% by the end of the term. He noted that Taiwan Semiconductor Manufacturing has proposed $260 billion in investment and Micron $250 billion, adding that a total of $1.2 trillion in investment commitments for U.S. manufacturing has now been secured.

Company/ItemInvestment ScaleTaiwan Semiconductor Manufacturing$260 billionMicron$250 billionSamsung Electronics (5-year memory & foundry MOU with Broadcom)$200 billionTotal cumulative U.S. manufacturing investment commitments$1.2 trillion

Table: Semiconductor-related U.S. manufacturing investment commitments cited by Commerce Secretary Lutnick

The U.S. government is also considering targeted tariffs on semiconductors. Lutnick argued that companies producing in the United States would avoid tariffs, while those that do not would have to bear the cost of accessing the U.S. market. He also projected that the Taiwanese government would announce an additional investment plan of $20–30 billion next week.

On the macroeconomic front, the global Treasury yield surge showed signs of easing. The U.S. 10-year Treasury yield moved around 4.78%, slightly lower than the previous trading day. New York Federal Reserve President John Williams assessed that the recent rise in Treasury yields stems not from inflation concerns but from a strong economic outlook and investment demand driven by AI technology. JPMorgan also noted that current bond market conditions are not as bad as during the 2022 wave of synchronized central bank rate hikes.

Broadcom’s positive earnings are expected to have an impact on the South Korean stock market as well. Foreign investors net sold 10.1659 trillion won (approximately $7.5 billion) in the KOSPI market during August, of which 7.13 trillion won (approximately $5.2 billion) came from the semiconductor sector alone. By stock, SK Hynix accounted for approximately 6.4 trillion won (approximately $4.7 billion) and Samsung Electronics 820 billion won (approximately $603.4 million). Given that both stocks plunged 6.4% and 9.92% respectively when Broadcom’s second-quarter AI revenue guidance fell short of market expectations, analysts suggest that the positive signals from this earnings call could serve as a catalyst for a reversal in foreign fund flows.

Park Jae-hwan, an analyst at Eugene Investment & Securities, noted: “The key points to watch in this earnings release were whether fiscal 2026 and 2027 AI revenue guidance would be revised upward, and whether supply chain capacity had been secured to support it.” Kim Jun-young, an analyst at iM Securities, projected: “Foreign net buying is likely to flow back in when a strong growth narrative is reconfirmed within the AI camp.”