JPMorgan analysts believe Broadcom (NASDAQ:AVGO) and Marvell Technology (NASDAQ:MRVL) will continue to dominate the ASIC chip market.
The analysts said in their note assessing the sector that they continue to believe that the Custom Chip (ASIC) market is a growing market opportunity "driven by the increasing complexity of compute, storage, and communications workloads and the increasing need for workload-optimized silicon designs."
"We estimate the high-end ASIC chip market is $13-15B opportunity growing at a 20% CAGR going forward," wrote the analysts, who added that Broadcom and Marvell hold the number one and two spots in the industry when it comes to market share.
"In CY22, we estimate that Broadcom had 35% market share and Marvell had 15% market share of the high-end custom ASIC market and will continue to dominate the market as their current ASIC design win pipeline includes ASIC designs in some of the fastest growing sub-segments of the ASIC market (cloud networking, compute acceleration, 5G networking, and enterprise storage)," they added.
JPMorgan believes Broadcom has a cumulative pipeline of over 80+ ASIC chip design programs at 7nm/5nm/3nm technology nodes, while Marvell has a cumulative pipeline of 40+ 5nm ASIC design wins and is targeting to engage on 3nm.