Broadcom Inc. (AVGO) Ships New Equipment Designed to Boost AI Chip Efficiency

Broadcom Inc. (NASDAQ:AVGO) has started shipping an upgraded version of its data center switch chips, designed to improve the efficiency of AI accelerators and expand its presence in the growing AI computing market.

Broadcom Inc. (AVGO) Ships New Equipment Designed to Boost AI Chip Efficiency

A technician working at a magnified microscope, developing a new integrated circuit.

The new Tomahawk 6 switch chips began reaching customers recently and will be widely available in July, according to Ram Velaga, Broadcom Inc. (NASDAQ:AVGO)’s senior VP of Core Switching. These switches are key networking devices that enable communication between computers, and one Tomahawk 6 chip can perform the work of six previous models.

Most AI computing depends on expensive and limited Nvidia GPUs, so the goal is to enhance their efficiency when connected through advanced networking.

As AI tasks grow more complex, data centers and researchers link tens of thousands or even hundreds of thousands of GPUs into supercomputers that rely on this networking gear to transfer data effectively.

Broadcom Inc. (NASDAQ:AVGO) expects that with the Tomahawk 6, customers will be able to complete tasks faster using their existing GPUs.

According to Ram Velaga, the new chip costs more than twice as much to produce as the previous version, and customers will pay roughly double the price, though exact figures vary due to volume discounts; the price is expected to be under $20,000 each. Velaga also mentioned that Broadcom Inc. (NASDAQ:AVGO) already has customers planning to use the Tomahawk 6 to link systems with over 100,000 GPUs. Typically, about one switch is needed for every 10 GPUs.

AVGO is up by nearly 11% since the start of 2025.

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