Alphabet (GOOGL) is looking for ways to cut the cost of its next AI chip, as the race to build cheaper and faster AI systems heats up. Per a new report from analyst Ming Chi Kuo, Google has asked Taiwan Semiconductor Manufacturing Company (TSM) how much it could save by placing wafer orders for its next TPU chip directly, rather than through MediaTek (MDTKF).
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New trading tool for AMZN bullsThe chip is said to be called Humufish, or TPU v8e, and is aimed for the second half of 2027. For now, MediaTek plays a key role in Google’s TPU supply chain. So, a direct deal with TSMC would mark a change in how Google runs that chain. Kuo said the move points to a “clear shift” in Google’s cost plan, as the firm looks for every way to lower chip spend while it scales AI.
This move is of significance as AI chips are among the biggest cost drivers in the AI boom. If Google can cut chip costs, it may help its cloud unit compete with Nvidia (NVDA), while also giving it more room to sell its own TPUs to select clients.
Meanwhile, GOOGL shares rose slightly on Friday, closing at $385.69.
Intel Also Has a Shot
At the same time, Intel (INTC) is trying to win part of the job through its chip package tech. Kuo said Intel Foundry’s EMIB T tech has reached about 90% yield in tests. Still, he warned that moving from 90% to the 98% level often needed for mass scale is the hard part.
That gives TSMC a strong hand, since its CoWoS package tech is still a key choice for high-end AI chips. However, Intel has set up its Rio Rancho site in New Mexico for mass production and is said to be in talks with major clients, including Google and Amazon (AMZN).
In closing, Google is trying to take more control of its AI chip costs and supply chain. That could help Alphabet over time, but it may also add new strain to partners like MediaTek and Broadcom (AVGO), which now help build Google’s TPU line.
Is Google Stock a Buy, Sell, or Hold?
Turning to the Street, Alphabet boasts a Strong Buy consensus view. Of 33 ratings issued, 28 analysts rate it a Buy, while five analysts rate it a Hold. The average GOOGL stock price target is $420.33, implying a 8.98% upside from the current price.
