How TSMC Came From Behind in Silicon Photonics and Won Over Nvidia and Broadcom

Hello,

There had long been speculation that networking chip giant Marvell, which also has an AI ASIC business, could emerge as a third contender for Google’s massive AI ASIC orders.

Now, that appears to be happening.

On Wednesday U.S. time, Marvell announced that it had signed a TPU-related commercial agreement with Google, covering a range of custom chip technologies for AI model processing, storage and networking.

What is more, Marvell is allowing Google to acquire shares at below-market prices: the more Google buys, the more shares it can acquire, up to a maximum of 58.97 million shares. If fully exercised, the stake would be worth about US$12.2 billion, making Google Marvell’s fifth-largest shareholder.

First, has Marvell taken a share of MediaTek’s（聯發科） TPU orders?

It does not appear so. According to Bloomberg, Marvell used relatively vague language: “Marvell’s products will support Google’s TPUs...”

A senior technology industry executive familiar with the matter told me that what Marvell has won “is not a TPU, but an LPU”—a niche AI processor designed for ultra-low-latency inference.

Remember, Nvidia invested US$2 billion in Marvell just this March.

Why is Marvell able to play both sides so effectively? And despite Jensen Huang repeatedly calling Taiwan the “epicenter” of the global AI supply chain, why has Nvidia never taken an equity stake in Taiwan’s supply chain?

“MediaTek definitely wouldn’t want that,” one analyst told me. “Once a customer becomes a shareholder, how are you supposed to win business from other customers?”

A corporate executive added that Taiwanese regulations do not allow companies to issue warrants of the type Marvell has offered.

Back to this issue of the newsletter.

This week, Nvidia announced that its first Spectrum-X switch incorporating silicon photonics and TSMC’s COUPE optical engine has entered mass production.

Why has silicon photonics taken two or three decades to finally become commercially viable?

What makes TSMC’s COUPE so powerful, and why could it dominate the market almost as soon as it arrives?

In conjunction with the Tech Taiwan Podcast, I interviewed a TSMC customer who has spent more than a decade working on silicon photonics R&D to answer these questions for readers.

Read on for this issue of the newsletter.