Samsung may have to outsource part of the production of the next generation of Google's AI-dedicated TPU chips to an external company, as its factories face tremendous pressure due to rising demand for advanced chip manufacturing.

According to a report from South Korea, Samsung is considering outsourcing the fabrication of the I/O Die for Google's new processor, codenamed Icefish, to a third party because its production lines are fully booked.

Google distributes manufacturing across several companies

Google relies on a supply chain involving multiple companies to develop the next generation of TPU chips, where:

- TSMC manufactures the Compute Tile using 1.4nm process technology.

- Samsung is responsible for producing the I/O Die.

- MediaTek handles chip packaging, using Intel's EMIIB-T technology.

This distribution reflects the complexity of manufacturing modern AI chips, which consist of several specialized units working together within a single chip, according to a report published by androidheadlines and reviewed by Al Arabiya Business.

Why does Samsung want to outsource to an external manufacturer?

Reports indicate that Samsung's factories are currently facing unprecedented pressure due to rising demand for AI chips.

The company's work is not limited to Google; it is also said to be manufacturing chips for Anthropic, a direct competitor to Google in the AI field.

Samsung is also benefiting from some 2nm chip manufacturing orders being redirected to it after TSMC was unable to meet all customer demands, further straining its production capacity.

What is the role of the I/O Die?

Modern AI chips typically consist of several parts, most notably:

Compute Tile: responsible for executing processing and computing operations.

Memory Tiles: manage memory.

I/O Die: handles data transfer between processing units, the motherboard, and the rest of the system components.

Although the I/O Die does not directly perform computational operations, it is a critical component for ensuring the speed and efficiency of data transfer within the system.

MediaTek enters the competition

In addition to Samsung and TSMC, MediaTek plays a significant role in the project by being responsible for chip packaging using Intel's EMIIB-T technology.

Analysts believe that the success of this technology will depend on production yields and manufacturing quality, which will determine how much Google relies on it in future generations.

Chips dedicated to Gemini data centers

Google aims to use these chips in its own data centers to power AI services, foremost among them Gemini, along with other applications that rely on intensive computing.

These chips should not be confused with the Tensor processors used in Pixel phones, as they share similar names but are intended for completely different purposes.

The AI race increases pressure on factories

These developments reflect the scale of pressure facing semiconductor manufacturers amid the huge surge in demand for AI chips.

They also indicate that production capacity has become a decisive factor in competition, as Samsung now manufactures chips for competing companies like Google and Anthropic, while also receiving some orders that TSMC cannot fulfill, confirming that global demand for advanced chips still exceeds available production capacity.

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