Broadcom's stock was under pressure following reports from Taiwanese media that Google plans to switch to MediaTek for the design of its next-generation Tensor Processing Units (TPUs) starting in 2028. This potential shift represents a significant threat to Broadcom's lucrative custom ASIC business, as Google is a key AI chip customer.
Analysts from Wedbush Securities noted that if the news is accurate, it would have "substantial ramifications" for the semiconductor market. It could challenge the perception of Broadcom's dominance in the custom chip space and provide a major boost to MediaTek. The news caused Broadcom's shares to decline as investors weighed the risk of losing a critical design win in the highly competitive AI accelerator market.