Taiwan Semiconductors: Mediatek and GUC riding on Google; Alchip more back-end loaded and capacity allocation is key

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Taiwan Semiconductors: Mediatek and GUC riding on Google; Alchip more back-end loaded and capacity allocation is key

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06 Jul 2026 11:37:18 ET │ 25 pages

Taiwan Semiconductors

Mediatek and GUC riding on Google; Alchip more back-end loaded and

capacity allocation is key

Laura (Chia Yi) Chen AC

CITI'S TAKE +886-2-8726-9090

Investors have been optimistic about AI ASIC surpassing GPU in AI laura.cy.chen@citi.com

computing since last year, yet due to a more fragmented supply chain and Jack Chen

tight component/material supply, such as wafer foundry, advanced

packaging, HBM and ABF, we expect Taiwanese design service companies +886-2-8726-9091

with better supply chain management capability to stand out with positive jack1.chen@citi.com

growth outlooks into 2027. We expect Mediatek and GUC to see the Nicholas Lai

strongest AI ASIC growth momentum into next year. We prefer Mediatek +886-2-8726-9093

most thanks to its higher value content upside with its increasing

contribution from I/O, top die and potentially optics and memory custom nicholas.lai@citi.com

based die in the longer term.

Mediatek - AI ASIC revenue to rise 50% in 2027, continue doubling into 2028 — We

estimate Mediatek’s AI ASIC revenue to reach US$18bn in 2027 and expect it to further

rise to US$40bn in 2028 (from previous expectations of US$13.6bn/18bn for 2027/28)

mainly due to higher dollar content increase thanks to its value added not just in I/O

die but also compute die. From 2028, we see Mediatek will contribute more on

multiple chip tile of its client’s chiplet design. Mediatek is also working on multiple

opportunities in AI ASIC projects – not only chip design but also hardware L6

architecture. We expect its AI revenue to exceed its current existing business in 2 years.