Morgan Stanley wants you to know the Broadcom bears have it wrong. In a note defending the chipmaker’s position in Google’s custom silicon pipeline, analysts led by Joseph Moore laid out a case that Broadcom’s role in building Google’s Tensor Processing Units is not only secure but growing fast, with TPU shipments projected to reach 3.2 million units in 2026 and 5 million in 2027.
The bull case in plain English
Broadcom isn’t just another vendor in Google’s supply chain. It’s the primary ASIC implementation partner, handling silicon design and advanced packaging for Google’s TPU generations, including the upcoming v7 and v8 chips.
The two companies extended their partnership through 2031, a detail disclosed in an April 2026 8-K filing.
Morgan Stanley’s analysts specifically flagged that bears have been overstating the risk of Google moving chip design fully in-house or turning to competitors. The reality, according to the note, is that Broadcom provides essential components that are hard to replicate, including high-speed SerDes, power management, and advanced packaging solutions.
While Broadcom does collaborate with MediaTek and potentially Marvell on some TPU work, it retains a majority role in the high-performance variants.
Why Anthropic’s compute deal changes the math
Anthropic, the AI lab behind Claude, is set to access approximately 3.5 GW of TPU-based compute resources starting in 2027 through the Google-Broadcom ecosystem.
The upward revisions in Morgan Stanley’s production forecasts reflect this demand dynamic. When your biggest customer is not only using your chips internally but also reselling access to them, your addressable market expands considerably.
Custom silicon vs. the GPU monopoly
Google has been running TPUs since 2015, making it arguably the most experienced player in the custom AI chip game. Amazon has its Trainium and Inferentia chips. Microsoft and Meta are pursuing their own designs.
What investors should watch
The partnership extension through 2031 provides unusual revenue visibility for a semiconductor company, where customer commitments typically span much shorter time horizons.
The key risk to monitor isn’t competition from other chip foundries. It’s whether Google eventually develops enough internal capability to reduce Broadcom’s scope. Morgan Stanley’s analysts argue this risk is overblown, pointing to the specialized nature of the components Broadcom provides.
The explosive growth in TPU shipments, from 3.2 million units in 2026 to a projected 5 million in 2027, reflects just how much capital is flowing into AI compute infrastructure.