GOOGL Explores Samsung Partnership For Next-Gen AI Chip Amid TSMC Capacity Crunch: Report

The reported plan would see Google split production between TSMC and Samsung as it seeks additional capacity for future AI chips.

• The processor, codenamed Icefish, is being developed as Google’s 10th-generation Tensor Processing Unit (TPU) for AI workloads.
• The project could enter mass production in 2028, although development timelines remain subject to change.
• Winning the contract would represent a notable boost for Samsung's efforts to expand its contract chipmaking business.

Alphabet’s (GOOGL) Google is reportedly in talks with Samsung Electronics to manufacture part of its next-generation artificial intelligence processor.

The company is said to be pursuing a split manufacturing strategy for the chip, with Taiwan Semiconductor Manufacturing Co. (TSMC) expected to produce the primary compute component of the tensor processing unit (TPU), while Samsung could manufacture a separate memory-interface component using its advanced 2-nanometer process technology.

At the time of writing, shares of Alphabet were down 1.9% in Thursday afternoon trading. 

Google’s Next-Gen TPU Plans

Google is considering Samsung Electronics for the production of a component used in its custom AI chip for cloud data centers, as tight manufacturing capacity across the industry pushes chipmakers to seek alternatives to TSMC, The Information reported.

The chip, codenamed Icefish, is currently planned as Google’s 10th-generation TPU, according to the report.

Google has traditionally relied on TSMC to manufacture its TPUs, but the Taiwanese foundry has faced surging demand for AI chip production, particularly from Nvidia (NVDA). At the same time, Google’s AI chips are attracting more external customers, increasing the need for additional manufacturing capacity to support higher production volumes.

Under the reported plan, TSMC would manufacture the most advanced portion of the chip using its upcoming 1.4-nanometer process technology, while Samsung would produce a separate component using its 2-nanometer process. 

Icefish Production Targeted For 2028

The arrangement would give Samsung an opportunity to showcase its manufacturing capabilities in a closely watched segment of the semiconductor industry. The Icefish project could serve as a key test of the company's 2nm technology.

The report said Icefish could enter mass production as early as 2028, although the timeline remains subject to change as the chip is still in development. Google is working with Taiwanese chip designer MediaTek on the project.

Process nodes such as 2nm and 1.4nm refer to generations of chip manufacturing technology. Smaller nodes generally enable higher transistor density, which can improve performance and power efficiency. 

Samsung’s Foundry Ambitions

Samsung has been seeking to expand its contract chipmaking business for years. The company launched its foundry business in 2005 and established a dedicated foundry division in 2017, but it has struggled to close the gap with TSMC in advanced chip manufacturing.

Securing work on Google’s next-generation TPU would mark a significant win for Samsung's foundry efforts. The company also won a contract from Tesla (TSLA) last year to manufacture its next-generation AI6 chip and is producing Nvidia’s language processing unit for the upcoming Vera Rubin platform.

GOOGL Stock: What Stocktwits Retail Sentiment Says

Retail sentiment on Stocktwits for GOOGL was ‘bullish, unchanged in the last 24 hours, while message volume was ‘normal.’

The GOOGL stock has gained nearly 100% in the past 12 months. 

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