Google Orders 3 Million TPUs from Intel as TSMC Capacity Bottlenecks
TSM•Google has placed an order for more than 3 million TPUs to be manufactured by Intel in 2028 after TSMC’s leading-edge capacity could not meet surging AI-chip demand. Taiwan Semiconductor’s shares slid 5.7% during a wider Kospi 8.3% crash as investors rotate from strained supply chains.
1. Google Moves TPU Production to Intel
Google has booked over 3 million tensor processing units to be built by Intel starting in 2028, shifting production after testing Intel’s chip packaging technology. This marks a significant detour from TSMC, which has historically produced the majority of Google’s AI chips.
2. TSMC Capacity Strains and Impact
Taiwan Semiconductor Manufacturing Co.’s leading-edge fabrication lines have been unable to absorb the surge in AI-chip demand, creating a bottleneck for high-performance chips and prompting major designers to seek alternatives to its foundry services.
3. Nvidia Evaluates Intel Packaging
Nvidia is assessing whether Intel’s four-chip fusion packaging can support its upcoming Feynman GPU architecture, potentially adding another high-profile client to Intel’s nascent foundry efforts if testing proves viable.
4. Market Reaction and TSMC Share Drop
TSMC shares fell 5.7% on a day when South Korea’s Kospi index plunged 8.3%, reflecting investor concerns over the company’s constrained capacity and the risk of revenue loss to competitors like Intel.
