Google hunts chips: How MediaTek is becoming the secret weapon in the TPU race

A boom with an announcement: Google’s hunger for AI is giving MediaTek a firework display of orders that is not only shaking up its own balance sheet, but also the CWoS capacities at TSMC. While the world stares at Nvidia and its H100 clones, another chip offensive is running at full speed in the background: Google is massively increasing its orders for dedicated tensor processing units (TPUs) and is relying surprisingly heavily on MediaTek. According to information from industry circles, MediaTek has not only taken over the production of the current TPU model “v7e”, but has also secured the order for its successor “v8e”. Both chips are manufactured by TSMC and packaged using their high-end CoWoS (Chip on Wafer on Substrate) packaging technology, a bottleneck that is now rapidly worsening.

A small order? Not at all.

MediaTek’s entry into the high-end ASIC business was under the radar for a long time. Analysts thought the company’s communication policy was a sign of internal problems, and there was even talk of delays in v7e development. Now it turns out that the silence was calculated. MediaTek will enter the risky pre-production phase with v7e in 2026, but even these chips will be delivered directly to Google if qualification is successful. Why the rush? Because Google is not willing to wait for the traditional production cycle of eight to nine months that would be required for CoWoS-based ASIC design. The message is clear: demand has exploded and the AI race will not tolerate any delays.

CoWoS: from premium service to bottleneck

CoWoS capacities at TSMC are already in short supply. Originally, 10,000 wafers per year were planned for the Google project, but MediaTek is now demanding double that. The target for 2027 is even 150,000 wafers, more than seven times as much. This order of magnitude signals a strategic change of course for all parties involved:

• Google: strategically distributes production to several partners in order to reduce dependencies.
• MediaTek: Repositions itself as a premium ASIC supplier, beyond the traditional SoC business.
• TSMC: Must reorganize priorities, who gets how much CoWoS and on what terms?

Two balance sheet years in one order

Internal market analysts estimate that the v7e cycle alone (2026-2027) could bring MediaTek a profit contribution of more than two full years of earnings (so-called “equity earnings”). In numbers: CEO Rick Tsai already stated a target of $1 billion in AI-ASIC revenue for 2026, and this is expected to multiply in 2027, towards several billion. This dynamic underlines the fact that MediaTek is no longer just “the cheap cell phone chip manufacturer from Taiwan”. If you want to play in the AI data center today, you not only need good contacts, but also uncompromising delivery capability. MediaTek seems to have both.

A new power bloc in the chip war

The strategic context is explosive. Google is apparently diversifying its TPU production in a targeted manner, away from Broadcom and Marvell, and is exploring new partnerships. The MediaTek deal is therefore more than just an individual order:

• It shows that traditional mobile chip manufacturers can very well play in the data center market if they want to.
• It underlines how much the big hyperscalers prefer their own chips instead of continuing to cling to Nvidia’s price dictates.
• It forces TSMC to divide its scarce CoWoS pipeline between Nvidia, Broadcom, Google and MediaTek, a balancing act that is politically explosive.

Long-term perspective: From contract manufacturer to co-designer?

MediaTek’s strategy goes beyond the mere “realization” of ASIC orders. According to CEO Tsai, the company is already working on significantly more complex AI accelerator projects, which should be ready for the market from 2028. And: negotiations are underway with a second hyperscaler for a potential major order, probably from the USA or China. These ambitions show that the path is leading from silicon baker to strategic chip co-designer. Supplying Google now builds trust for the next big deal and secures a place in the race for the AI infrastructure of tomorrow.

Conclusion: The quiet awakening of a giant

While Nvidia enjoys the limelight, MediaTek is quietly and efficiently building a new business pillar. Google is not just a customer, but a springboard to billion-dollar projects. If the v8e deal works out and TSMC delivers, MediaTek is on the verge of one of the biggest expansions in its history. And the competition? They will have to ask themselves how they underestimated the once ridiculed SoC manufacturer for so long.

Source: Money