Google's AI Chip Expansion Spells Prosperity for South Korean Semiconductor Giants

Google's aggressive push in AI hardware with its tensor processing units (TPUs) is anticipated to boost the demand for high-bandwidth memory, significantly benefiting South Korean semiconductor giants such as Samsung Electronics and SK hynix. This shift in the AI chip market could diversify suppliers and enhance profitability across the sector.

Google is poised to shake the artificial intelligence hardware landscape with its tensor processing units (TPUs), stirring high hopes for South Korean semiconductor leaders Samsung Electronics and SK hynix. A Pulse report highlights Google's strategy to supply its TPU chips, already used in its in-house AI model Gemini 3, to other tech behemoths like Meta.

Sources indicate Meta is contemplating incorporating Google's TPUs into its data centers set to commence operations in 2027. Developed in conjunction with US chipmaker Broadcom, TPUs are engineered to power AI tasks with remarkable efficiency, challenging Nvidia's market dominance in graphics processing units (GPUs).

Notably, Google's TPU is praised for delivering AI performance on par or exceeding that of Nvidia's hardware, all while being cost-effective. According to industry estimates cited in the report, TPUs are up to 80% cheaper than Nvidia's flagship H100 GPU. Although Google's Ironwood, its seventh-gen TPU, may not match Nvidia's forthcoming Blackwell chips in raw power, it surpasses the current H200 model.

This transition to diverse suppliers, driven by broader TPU adoption, is projected to amplify the semiconductor supply chain's profitability, bolstering major memory entities like Samsung and SK Hynix. The report underscores that each TPU encompasses six to eight HBM modules, directly linking TPU proliferation to rising HBM demand.

SK hynix is already supplying fifth-generation HBM3E chips for Google's Ironwood, with plans potentially involving 12-layer HBM3E modules for the next-gen TPU, nicknamed '7e.' This heightened use of HBM by Google is expected to intensify the current supply scarcity, says Chae Min-sook, an analyst at Korea Investment & Securities.

Amid these dynamics, Samsung Foundry is emerging as a formidable alternative as TSMC, the global foundry leader, raises prices for advanced processes. Samsung's progress in 3-nanometer and 2-nanometer nodes is drawing attention, coupled with its capacity to offer comprehensive solutions that merge memory, foundry and advanced packaging.

An anonymous industry source noted that Samsung's new fabrication site in Taylor, Texas, capable of producing sub-2-nanometer chips, could seize a major opportunity with the TPU market's growth.

(With inputs from agencies.)