[Semiconductor_Fabless] Google: Expanding Beyond Search Ads into In-House Semiconductor Development

 

Google : Alphabet C

[Posting: 2025.05.01]

The software giant Google has been pursuing a strategic shift toward cloud, AI, and semiconductor internalization since 2020. Search advertising, which accounts for 56% of its total revenue, remains the company’s primary source of income. With the introduction of AI Overviews and Circle to Search, user engagement is steadily increasing.

In terms of semiconductors, although revenue from this segment stood at approximately $4 billion in 2024—only 1.1% of total revenue—Google’s internalization strategy is expected to expand its share in the coming years. Semiconductor-related revenue includes earnings from AI infrastructure within Google Cloud, Tensor SoCs in Pixel devices, and licensing of TPU and Axion chips.

The Tensor G1 to G4 models, which serve as SoCs for Pixel smartphones, were manufactured using Samsung Foundry's 4nm and 5nm processes. However, the upcoming G5 version is expected to be manufactured using TSMC’s 3nm node.

Though Google is still considered a newcomer in the semiconductor industry, its in-house chip development strategy is poised for continued strategic growth.


🔍 [Alphabet Inc. Company Report] Google in 2024 – Revenue, Semiconductor Strategy, and Product Segmentation

[Posting: May 1, 2025]
Alphabet Inc., the parent company of Google, has solidified its position as a global technology leader. From search and advertising to artificial intelligence (AI), cloud computing, and custom semiconductor design, Alphabet’s growth in recent years reflects its expanding technological scope.

🏢 Company Overview & Milestones

  • 1998: Google founded by Larry Page and Sergey Brin

  • 2004: Listed on NASDAQ

  • 2015: Reorganized under Alphabet Inc.

  • 2020–2024: Expansion into AI, custom chips, and cloud infrastructure

📊 Alphabet Inc. (GOOG) Financial Performance (2019–2024)

YearRevenue (B$)YoY GrowthOperating Income (B$)YoY Growth
2019162.0–34.2–
2020182.3+12.5%41.2+20.4%
2021257.0+41.0%78.7+91.0%
2022282.8+10.0%74.8–4.9%
2023307.4+8.7%84.3+12.6%
2024350.0+13.9%112.4+33.3%

In 2024, Alphabet recorded its highest-ever revenue and operating income.

📈 Q4 2024 Highlights

  • Quarterly Revenue: $96.5 billion (YoY +12%)

  • Operating Income: $30.6 billion (YoY +20.2%)

  • Operating Margin: 31.7%

  • Key Drivers:

    • Recovery in search and YouTube advertising

    • Cloud and AI infrastructure growth (Gemini, Vertex AI)

    • Increased hardware sales (Pixel 8, Pixel Watch)

🧩 2024 Revenue Breakdown by Product/Service

SegmentRevenue (USD Billion)Share (%)
Google Search & Others198.156.6%
YouTube Advertising36.210.3%
Google Cloud43.212.4%
Google Network Advertising30.48.7%
Subscriptions, Platforms & Devices30.58.7%
Other Bets (e.g., Waymo, Verily)1.10.3%
Semiconductor-related Revenue4.01.1%
Total350.0100%

⚙️ Semiconductor Strategy & Foundry Partners

Chip/PlatformPurposeDesignerFoundryProcess Node
Tensor G1–G4Pixel smartphone SoCGoogleSamsung Foundry5nm / 4nm
Tensor G5Next-gen Pixel (2025)GoogleTSMC3nm
TPU v1–v5pAI compute accelerator (Cloud)GoogleInternal/OutsourcedN/A
Axion CPUData center ARM-based CPUGoogleUndisclosed<5nm Expected
WillowQuantum computing chipGoogleR&D Prototype–

Google is expanding its in-house chip design capabilities while working with TSMC, Samsung, GlobalFoundries, and SkyWater.

💼 Employee Compensation (2024)

  • Median Annual Salary: $331,894 (approx. ₩450 million KRW)

  • Engineer Salary by Level (USA):

    • L3: $186K

    • L4: $294K

    • L5: $380K

    • L6: $539K

    • L7: $781K

    • L8: $1.12M

    • L9: $2.28M

Google is renowned for competitive salaries and world-class employee benefits.

🧠 Use Cases & Strategic Focus

  • Search & Discovery: AI-enhanced Google Search, Circle to Search

  • Cloud & AI: Vertex AI, Gemini, PaLM 2, Google Cloud Platform

  • Hardware: Pixel Series, Nest Smart Home, custom Tensor SoC

  • Advertising: YouTube Ads, AdMob, Google Ads

  • Quantum R&D: Willow chip for quantum error correction


✅ Summary

Alphabet’s 2024 performance highlights a strategic shift beyond advertising to AI and semiconductors. With custom chips like Tensor, TPU, and Axion, Google is solidifying its position in high-performance computing. Its reliance on TSMC and Samsung Foundry underscores its deep integration into the global semiconductor ecosystem. Looking ahead, Google’s expansion in AI infrastructure and custom silicon development will likely remain key drivers of future growth.

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