The stock turbo on the EA888 Gen3 2.0t engine thats in the MK7 GTI is the IHI IS20, the Golf 1.8t has the IS12 and the R 2.0t has the IS38. Previously VW used a lot of Borg Warner turbos but with the MK7 they have switched to IHI. Think of the IHI IS20 as the Borg Warner K03 and the IS38 as a K04.
A common upgrade to the GTI is adding the IS38 from the Golf R, its a direct bolt on no special parts required. All you need to do is add supporting software and it works great! It adds up to 40hp over a STG 1 tune for the IS20. But… you loose 12 TQ. The reason for this is it takes longer for bigger turbos to spool up and get going. Sure your over all HP and top end speed is faster but you will be slower from the start. I personally do most of my driving between 0-60mph which is great for small turbos as they spool quick and deliver fast, but they also run out of steam when you get the higher MPH range. The IS38 allows to car to keep pulling even after the little IS20 ran out of oompf. It moves the sweet spot of the power band up so you start off slower, but eventually surpass as you go faster!
What im getting at is, what speed do you commonly drive at to have fun? If its below 60mph then an IS38 likely isn’t going to be as enjoyable as an IS20. I personally drive lots of mountain roads and love getting thrown back in my seat by the low end TQ at 30-50 or so MPH when I floor it, its amazing! So I will be sticking with the IS20 as its better for those types of speed. If you enjoy 70+ MPH then the IS38 is a solid pick for you.
Another option is to get a hybrid turbo. You take the IS20 core and replace its innards with different turbine and maybe performance bearings or a housing. One company Littco does a hybrid IS20 that keeps your low end power band and gives you IS38 HP numbers. The downside to this is you need to send a working IS20 to them as well as some extra cash for them to modify it. Most cant have their car down for that long. That along with a custom tune to get the most of out of the turbo makes it less appealing.
There is also a plethora of third party turbos like the EQTuning Vortex which gets great reviews at a reasonable price and puts out some great numbers.
So before you drop your hard earned cash on an IS38 make sure it is right for you, you may find the IS20 is actually perfectly fine or spend a bit more for a hybrid such as the EQT Vortex.
Update: There are now non-VW IS38’s on the market. These turbo’s are still made by IHI just cheaper in price. They seem to be selling for about $400 USD less which changes my opinion a little. The price gap between the hybrids and IS38 is greater now and with the lack of upgrades needed to take advantage of an IS38 this creates a new bracket. Being someone who wants to retain their stock downpipe this is now tempting. I would be wasting a lot of potential with a turbo such as the EQT Vortex on a stock downpipe.