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The market opportunity for high-quality, custom-designed semiconductors used to support artificial intelligence projects is growing faster than JP Morgan had anticipated.

On Friday, analyst Harlan Sohr increased his estimate of the market size for ASICs, which stands for Application-Specific Integrated Circuits, or custom-made custom chips. He offered a range, with a minimum of $13 billion to $15 billion and a higher of $15 billion to $18 billion.

He wrote that “the massive adoption of generative AI…is accelerating the demand for custom chip (ASIC) AI computing accelerators”.

from Broadcom

(Stock ticker: AVGO) f

Marvell technology

(MRVL) “Will be the biggest beneficiary of this resurgence in custom chip design.”

in Friday trading,

from Broadcom

The stock fell 1.5%, to $814.45, and

Marvell technology

Shares fell 0.1% to $57.51.

Generative AI has been a popular investment topic this year. Technology ingests text, images, and videos to create content. The OpenAI release of ChatGPT late last year sparked interest in this form of AI.

Sur expects the overall ASIC market to grow by 20% annually in the future. According to the analyst, Broadcom is the market leader with a 35% share, followed by Marvell with a 12% share. Since June, Broadcom is believed to have won two or three major new custom chip projects, while Marvell has secured one or two other deals.

“We believe these customer initiatives continue to drive strong order/design activity for both Broadcom and Marvell,” he wrote.

The analyst has an overrated rating on Marvell stock with a $70 price target. It currently has no ratings on Broadcom; He dropped the coverage after it was announced that JPMorgan was acting as a financial advisor to

VMware

(VMW) in connection with its sale to Broadcom.

Marvell is scheduled to report its second-quarter financial results next Thursday.

Write to Tae Kim at tae.kim@barrons.com