Could MediaTek Threaten Broadcom’s Lead in AI Chips?

On the Sept. 24, 2026, bonus episode of The Morning Filter podcast, co-host Dave Sekera sits down with senior analyst William Kerwin to discuss how we think Broadcom AVGO stacks up against its competitors. Here is an excerpt from the show.

How Broadcom Stacks Up Against Competitors

David Sekera: Got it. OK. When I’m thinking about who the competitors are here to Broadcom, how do you see that competitive landscape over the next couple of years? Is there really anyone out there that can compete with Broadcom today? Are there other people that you’re concerned about coming in over the next couple of years and being able to do the same sort of design on these types of products?

Will Kerwin: It is a field with competition, but Broadcom, from a scale and from a technology perspective, we think clears the rest of the pack. The two that I would name are Marvell, a name that you referenced at the top of the show. They have a small business, but they have designs with Microsoft MSFT and with Amazon Web Services, or AWS. And then MediaTek 2454 as well, which is kind of the one in focus for Broadcom investors because they are the secondary source now in Google for the TPU. Now, I’m sure we’ll get to this a little bit later on. There have been some concerns that maybe MediaTek will eat Broadcom’s lunch and take over its primary source. We don’t see that to be the case, but those would be the big three. There are some smaller kind of design consultancy shops out of Taiwan, but really it’s Broadcom at the top and then Marvell and MediaTek.

Why Demand for XPUs Could Continue to Grow

Sekera: OK. Just thinking about technology in general, it’s certainly one of the fastest adapting fields out there. How can we be as confident as we can be that you don’t have any kind of new technology, new algorithms, shifts in software that you wouldn’t need this type of XPU product really to be able to run that inference going forward?

Kerwin: It’s certainly a fast-evolving environment, but actually what we are seeing is that the shift is moving toward more XPUs rather than less. And so what we’re seeing is more heterogeneity in computing, and effectively you could interpret that as being good for the flexible GPUs, and that can be the case. But what we see is these large customers, that are kind of the sweet spot for an XPU provider, are building out more large use cases that could portend maybe they don’t just have one XPU, but maybe they have a couple different XPUs for multiple different use cases.

We actually see the mix shift moving toward XPUs, again, not reaching a majority of the market and it’s far from our expectation, but what we see is this heterogeneity and more of these massive scale applications actually being beneficial for the mix shift toward XPUs.

Why Morningstar Thinks Broadcom’s Moat Is Durable

Sekera: Which kind of leads to the next question. Of course, we wouldn’t be Morningstar without talking about the

. In this case, our moat committee has awarded the company with a wide economic moat, meaning that we think they have long-term durable competitive advantages, so they’ll be able to outearn their cost of capital for at least the next 20 years. Again, in a field like technology where things move so fast, what’s really the primary moat source here, and how do you think about that over that long of a time period?

Kerwin: Well, with chips like this at kind of the cutting edge, we think predominantly about intangible assets. And really this breaks down to the design prowess that Broadcom has in designing these XPUs and its networking chips for that part. I mean, I may have glossed over the networking chips a little bit at the start, but those have a big place in AI as well. Broadcom’s AI chip business, XPUs, are by far the biggest portion, but these networking chips, connecting XPUs and GPUs together, also vital and also important.

The design prowess there is really what makes the moat for Broadcom, and we would call it by far and away the primary moat source. And really, this comes down to the best performance, whether that’s in an XPU or a networking chip, being first to market for the next generations of these, so, for the next fastest XPU, the next speed of networking that you achieve. What we’ve actually seen is Broadcom supports this with a massive research and development budget. Again, its scale dwarfs those of its competitors, so it’s able to outspend and still be extremely profitable. And what we’ve seen in networking, at least, is actually that its technological lead has expanded over time. We look at that as: When you get to a new speed of networking, who is first to market? And Broadcom has had a lead for some time, and we’ve actually seen that expand in terms of when its competitors bring out a new product.

So, intangible assets are the primary source; really, the design of these chips is extremely hard to replicate. They’re at the cutting edge, really second only to Nvidia in our view. And then I would add on the software business, nothing to scoff at in terms of scale, and 30% of overall revenue. We see pretty significant switching costs there too. We awarded a moat to VMware preacquisition by Broadcom, and really this is just that designing a data center around this software stack, it becomes incredibly difficult to rip out. We think intangible assets are primary, but for that software business, also switching costs.

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