MediaTek's stock dropped sharply after word spread that Google may pull part of its custom AI chip work away from the Taiwanese designer — bad news for MediaTek investors, good news for rivals Broadcom and Marvell.

• Google's end customers are reportedly hesitant to use MediaTek chips and prefer suppliers with a proven mass-production record.
• The next-generation TPU built around the newest high-bandwidth memory could be handed to Marvell instead.
• MediaTek is said to be hitting engineering trouble — failed chip test runs, performance below target, missing high-speed licensing that forces it to build its own, and low yields on Intel's packaging.
• Samples of the earlier chip may now slip to 2027 rather than arriving this year.
• MediaTek still sounds confident: its first AI accelerator goes into mass production this quarter, and data center revenue should top $2 billion this year.

Outlook: MediaTek is betting on an AI boom next year, backed by a big convertible bond raise that Nvidia and Google both bought into, but the market will stay nervous until chips actually ship.