Broadcom Inc - 8% PRF CONVERT 30/09/2022 USD 1000 - Ser A

Q2 results: record momentum driven by AI semiconductors - Total revenue reached $22.2B (+48% YoY), above guidance. - Semiconductors revenue: $15.0B (+79% YoY); AI semiconductor revenue: $10.8B (+143% YoY) (record, above outlook). - Margins remained very strong: Operating margin ~67% and Adjusted EBITDA ~69% of revenue (both record / above guidance). - Mix pressure noted: Gross margin 77.1% (-32 bps YoY) largely due to AI semiconductor mix scaling faster than software (not presented as structural margin deterioration).

AI semiconductor outlook: very large growth expectations (with strong bookings visibility) - Q3 total semiconductor revenue: ~$20.5B (+124% YoY). - Q3 AI semiconductor revenue: ~$16B (+200%+ YoY). - FY2026 AI semiconductor revenue: $56B (~+180% vs FY25). - AI semiconductor guidance reiterated for FY2027: “in excess of $100B.” - Demand vs shipments: Q2 AI semiconductor bookings >$30B on $10.8B shipped, highlighting lead-time-driven order timing and strong visibility.

“Gigawatt” customer ramp commitments (opportunity) - Management emphasized multi-gigawatt commitments across major customers, with deliveries extending into 2026–2028, supporting sustained demand. - Key examples cited: - Google (multi-generational TPUs + AI networking): long-term agreement; commitment “very substantial” (dollar value not disclosed). - Anthropic: access to TPU-based compute >1 GW in 2026 and agreement for +5 GW starting 2027. - OpenAI: on track for production late 2026; contractual 1.3 GW in 2027 (within a larger 10 GW by 2029 agreement). - Meta: partnership for MTIA X XPUs + networking, targeting 3 GW through end of 2028; initial 1 GW order begins delivery 2H 2027. - Purchase orders disclosed to date total ~$6B (supporting pipeline strength).