Intel Turning Point: Is Google Ready to Commission the Production of Over 3 Million AI Chips?

According to reports from The Information, Google has decided to entrust Intel, or more specifically its Foundry division, with the production of some of the future TPU (Tensor Processing Unit), which are proprietary accelerators designed for artificial intelligence workloads. This decision came after several months of evaluations and tests conducted by Google on Intel's production capabilities. The rumor indicates that over 3 million specialized chips are expected to be produced by 2028, a significant volume that would represent a strong vote of confidence in Intel's manufacturing division.

The news had an immediate impact on the financial markets. Intel's shares saw a sharp rise on Wall Street. Additionally, the stock has already tripled in value since the beginning of the year, bolstered by investor optimism regarding the progress of the company’s turnaround plan and the prospects offered by the increasing demand for infrastructure for artificial intelligence.

Interest in Intel is also fueled by TSMC's difficulties in meeting the high production demand from the AI market. The pressure on the Taiwanese manufacturer's plants is pushing some companies to consider alternatives to ensure sufficient capacity for the coming years.

At this time, it is unclear whether the collaboration between Google and Intel will involve the manufacturing of semiconductors or advanced packaging services. It could also concern both areas. Advanced packaging has been a focus of Intel's investments in recent years, yielding excellent results, and has become an increasingly important element in an era of chips characterized by multi-die structures. Integrating multiple components within the same package allows for significant performance increases, circumventing challenges in the advancement of manufacturing processes.

Intel has already informed investors that it has accumulated an order portfolio worth several billion dollars specifically in the advanced packaging sector. A potential deal with Google would further enhance the credibility of Intel Foundry among other potential customers.

NVIDIA is also reportedly evaluating Intel's manufacturing technologies. According to The Information, the manufacturer of the most widely used GPUs in the AI market is testing the possibility of utilizing Intel’s processes for a future processor that "would integrate four graphics chips into a single solution." However, this information has not been officially confirmed.

For Intel, an order for 3 million chips alone would not be enough to immediately change the financial situation of the manufacturing division, which continues to report operating losses. The indicated volume corresponds to about a month of production from a large factory. However, the strategic value of the operation would be significant: gaining the trust of companies like Google for products destined for critical AI infrastructure would represent an important technological validation and could facilitate the acquisition of further customers.