Shares of MediaTek fell sharply in Taipei amid fears that Google is reducing its reliance on outside chip manufacturers, disrupting Taiwanese semiconductor stocks and signalling potential shifts in AI supply chains.
MediaTek fell sharply in Taipei trading on Wednesday after renewed concern that Google is reducing its dependence on outside chip suppliers, with the latest pressure adding to a broader sell-off in Taiwanese semiconductor shares. By late morning, the stock had dropped below NT$4,000 and was trading weaker than its short-, 10- and 60-day moving averages, according to local market reporting. The decline came as investors also looked ahead to the settlement of Taiwan index futures, where large foreign short positions have raised expectations of further index-level pressure.
The immediate trigger was a note from the research firm SemiAnalysis, which cut its outlook for Broadcom’s Google TPU shipments in 2026 and 2027. That assessment fed fears that MediaTek, as part of Google’s TPU supply chain, could face weaker demand than previously expected. Macquarie separately downgraded Broadcom from “Outperform” to “Neutral”, saying Google is working to lower its reliance on the chip supplier while increasing internal chip development and working with MediaTek. The bank said Broadcom’s share of Google TPU-related revenue could fall from about 95% in 2026 to 65% in 2028.
The broader market concern is that major cloud service providers are moving more aggressively towards COT, or customer-owned tooling, models. Under that approach, customers retain control over chip architecture and product definition while outsourcing parts of physical design, advanced packaging and manufacturing to external specialists. That shift has prompted fears that demand for ASIC makers, which build customised chips for specific clients, could weaken. Industry players, however, argue that large cloud customers run diverse product lines and will still need external design partners, even if they want more control over the early stages of chip development.
Recent reporting on Broadcom suggests the issue is not a collapse in AI demand, but a reassessment of how much of the value chain individual suppliers can keep. Macquarie said Broadcom’s near-term results remain strong, with fiscal second-quarter revenue of $22.2bn and AI revenue of $10.8bn, but it also cut its 2028 earnings forecast. Other reports said Google may even bring TPU design fully in-house by 2027 and consider replacing Broadcom in some networking-chip work, although Google has said it remains “productively engaged” with Broadcom and sees “no change in our engagement”. For MediaTek, the market is now pricing in the possibility that closer ties with Google may not translate into an immediate or automatic gain.
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