MediaTek's AI Chip Ambition: New Supplier for Alphabet, Is Broadcom's Market Share at Risk?

MediaTek aims to capture %15‑%20 of an estimated $800 billion custom AI‑chip market by 2027. Its first AI accelerator for a major U.S. cloud provider will enter production in Q4, and the company projects $2 billion-plus data‑center revenue for 2026.

MediaTek's Target and Financial Playbook

To back its market‑share ambition, MediaTek has earmarked a discretionary $5 billion financing budget. Yet mobile‑chip revenue fell 20% and net income slipped 12.3%, underscoring the push for revenue diversification.

■Market size: $800 billion (2027)

■Target share: 15‑20% (≈ $12‑$16 billion)

■2026 data‑center revenue: > $2 billion

■Discretionary financing: $5 billion

Alphabet's Supplier Diversification and Cost Leverage

Google is evaluating MediaTek as a second ASIC partner for future Tensor Processing Units, which could expand design capacity and improve supply‑chain resilience. MediaTek’s TSMC relationship and lower cost‑of‑ownership claim offer Alphabet new bargaining power.

■Potential second ASIC partner: MediaTek

■Design capacity boost: significant expansion

■Cost advantage: lower total cost of ownership

Broadcom's Long‑Term Google Deal

On April 6, 2024, Broadcom sealed a contract to supply custom AI chips and rack components to Google through 2031. The agreement also includes providing Anthropic with 3.5 GW of computing capacity starting in 2027, cementing Broadcom’s role in Google’s roadmap.

■Contract horizon: 2024‑2031

■Supplying rack components and chip development

■Anthropic access: 3.5 GW of compute (from 2027)

Investor Stance and Short‑Interest Dynamics

Insider Monkey data shows a modest decline in institutional interest in Broadcom. As of Q1 2026, 174 hedge funds still hold Broadcom shares (down from 203 in Q4 2025), while short interest sits at 1.47% of float, with an average cover ratio of 3.0 days.

■Q1 2026 hedge‑fund holders: 174 (Q4 2025: 203)

■Short position: 68,638,929 AVGO shares (%1.47 of float)

■Days to cover: 3.0

Bora Yalın – Lead Researcher, International Capital Flows: MediaTek’s aggressive push deepens the AI‑chip rivalry and could reshape Alphabet’s supply calculus. While Broadcom’s long‑term contract offers a protective moat, the price‑competition and supply‑flexibility angles mean Alphabet’s split between two major partners may inject volatility into related equities. In the short run, Broadcom’s low short‑interest suggests confidence in the existing deal, but MediaTek’s growth trajectory and potential cost edge could draw risk‑on capital toward tech stocks.