Custom ASIC and XPU
An application-specific chip designed for one operator's workloads, such as an in-house AI accelerator; XPU is a generic term for such non-GPU accelerators.
An ASIC (application-specific integrated circuit) is built for a narrow set of tasks rather than for general use. Large cloud operators design custom AI accelerators with a design partner and typically manufacture them at a major foundry. XPU is a loose label for non-GPU accelerators of this kind, used widely in discussions of custom AI chips.
Traders care because custom chips move part of AI accelerator spending away from merchant GPU suppliers toward design partners and foundries. Volumes depend on a few large customers and on how each one splits its orders. Custom chips can still drive large foundry and packaging demand even when GPU unit shares fall.
Worked example (illustrative numbers, not real data): a cloud operator buys 1 million accelerators a year, all from one GPU vendor. If it moves 200,000 of those units to a custom ASIC, the GPU vendor's units fall 20 percent, while total wafer and packaging demand may change much less.