Google is currently in discussions with Samsung Foundry regarding the production of components for its custom Tensor Processing Units, which could significantly alter the semiconductor supply chain that is vital to the ongoing AI revolution. In December 2025, executives from Google visited Samsung's fabrication plant located in Taylor, Texas, focusing on production capabilities and potential manufacturing volumes. Although no formal agreement has yet been finalized, these talks represent a noteworthy change in how Google acquires its crucial AI hardware.
Why is Google considering alternatives to TSMC? Historically, Google’s TPUs, developed in partnership with Broadcom, have been manufactured by TSMC. However, improvements in Samsung’s yield rates on advanced process nodes have attracted Google's interest. Enhanced yield rates directly correlate with reduced costs and improved reliability of supply.
The collaboration between Google and Samsung is not new. Samsung provides over 60% of the High Bandwidth Memory used in Google’s seventh-generation Ironwood TPUs, and this partnership is poised to strengthen with the upcoming HBM4, Samsung’s next-generation memory technology set to be unveiled in 2026.
What advantages do TPUs offer? TPUs are reported to yield performance similar to Nvidia’s H100 GPUs but at approximately 80% lower costs. Should Google acquire dedicated manufacturing capacity from Samsung, the cost benefits may become even more significant.
What does Samsung stand to gain from this relationship? Securing Google as a foundry client would validate Samsung's manufacturing capabilities, especially since the company has struggled to compete with TSMC for high-profile chip fabrication contracts, which currently serves major players like Apple, Nvidia, and AMD. Samsung’s fabrication facility in Taylor, Texas plays a crucial role in the company's ambitions within the U.S. market, and partnering with a major client like Google would strengthen the justification for their extensive investment in American manufacturing capabilities.
What can investors anticipate from this potential deal? If negotiations lead to a formal partnership, TSMC could experience a slight decrease in one of its significant custom chip contracts. For Samsung, solidifying this collaboration with Google would likely bolster confidence among investors regarding the company’s foundry division, underscoring its role in the competitive semiconductor market.