Partnering With Google To Develop Custom Chips And Potential $12.2 Billion In Investment, Mywell Technology Surged In Response!

Mywell Technology has reached a custom chip cooperation agreement with Google and issued a warrant to Google, allowing the latter to purchase approximately $12.18 billion worth of Mywell Technology shares. Boosted by this news, Mywell Technology's US stock market surged nearly 10% on Wednesday.

In recent years, as companies seek alternatives beyond Nvidia's expensive graphics processors, demand for Google's custom chips such as Tensor Processing Units (TPUs) for AI workloads has surged. According to statements released by Mywell Technology and Google, the two companies will collaborate to develop AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near-memory computing technologies.

Mywell Technology stated that it has issued warrants to Google to purchase up to 58.97 million shares, with an exercise price set at $206.58 per share. On July 29, the company signed a commercial agreement with Google to provide custom chip products. Within the first year after the agreement is signed, 1,360,867 warrants will vest each quarter. The remaining shares will be vested based on Mywell Technology's "self-purchase" from the third quarter of

fiscal year 2027 to the end of fiscal year 2033. Each time a jointly developed product generates $500 million in revenue, a batch of shares will be allocated.

Mywell is expected to benefit from strong demand for optical communications and networking products. Recently, hyperscale cloud providers such as Google, Meta, and Amazon have continued to point to rising AI infrastructure spending. Meanwhile, as highlighted in NVIDIA's recent earnings preview, Blackwell will remain strong and the Rubin platform is accelerating growth. Given the optical communication content provided by Mywell within the NVIDIA ecosystem, both will bring positive news.

Investors may have underestimated Mywell's custom ASIC business, especially its partnership with Microsoft, which currently shows procurement could exceed 1 million units. This may add another $1 billion to $2 billion in revenue on top of Mywell's guidance of about $2 billion.

Market Insight:

For Google's CXL add-on plan, Mywell's average single-chip price exceeds $1,000, which is another substantial tailwind, depending on the assumption of CXL adoption rates. Investor outlook on the swap chip business has also become more optimistic: it is now expected that revenue from this business in the 2027 calendar year could approach $1.2 billion, compared to management's previous forecast of about $1 billion.