Google orders Intel Foundry to produce over three million TPUs for 2028 amid TSMC capacity crunch

Despite a rough couple of years for the company, Intel could be set to make a turnaround after its foundry just received what could be its biggest validation yet. According to a report from The Information, Google has placed an order with Intel to manufacture more than three million Tensor Processing Units in 2028. Intel's stock jumped more than 9% on the news, adding to a gain that has already seen the stock climb nearly 169% this year.

Google's TPUs are its in-house AI chips, designed to reduce reliance on NVIDIA's GPUs while powering its own AI services and cloud offerings. Google is reportedly expected to produce more than six million TPUs between 2027 and 2028, with Intel handling roughly half that volume. Previously, TPUs were co-designed by Google and Broadcom with TSMC handling production.

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TSMC holds around 73% of the global foundry market and remains the dominant producer of advanced chips for NVIDIA, Apple, and Google. But the AI boom has pushed demand well beyond what TSMC can comfortably handle. TSMC's own chairman recently acknowledged that customer demand is reaching the limits of what the company can manage, and the company is reportedly fully booked out until at least 2028. That capacity crunch has created an opening for Intel that would have been difficult to imagine a few years ago.

The Information also reports that NVIDIA is evaluating whether Intel's technology could support a design that combines four graphics chips into a single processor, associated with Intel's Feynman architecture, expected around 2028. No order has been placed, but the fact that NVIDIA is testing Intel at all speaks to how tight high-end manufacturing capacity has become.

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Intel's turnaround under CEO Lip-Bu Tan has been built around making its foundry arm a credible alternative to TSMC. The company has secured government investment, SoftBank backing, and Tesla as a customer for its next-generation 14A process for Elon Musk's Terafab AI facility. A preliminary deal to manufacture chips for Apple was also reported last month. The Google order, if confirmed, would be the largest external win in Intel Foundry's history.

There has been no official comment from Intel, Alphabet, or NVIDIA, so for now, the news remains unconfirmed.