Nvidia Is TSMC’s 2nd Biggest Customer Following AI Boom

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Although TSMC is required by US law to provide information on clients who generate more than 10% of its revenue, the company has historically avoided disclosing specifics of its customer ties.

According to financial expert Dan Nystedt’s projections, Nvidia generated 11% of TSMC’s revenue in 2023.

Apple, whom TSMC refers to as “Customer A” in its SEC filing, generated 25% of its revenue last year and gave it $17.52 billion. Nystedt estimates that Nvidia, who is listed as Customer B in the petition, paid TSMC $7.73 billion in 2023 and contributed 11% to TSMC’s net sales.

Apple has long been TSMC’s biggest client, and it will likely stay that way in the years to come. More than 10% of the Taiwanese contractor’s net revenue has not come from any other client in a while, despite recent increases in order volumes from AMD, MediaTek, and Qualcomm.

The green team has seen a surge in order quantities due to the exceptional demand for NVIDIA H100 and A100 accelerators brought on by the high demand for artificial intelligence technology.

2024 will probably see a rise in Nvidia’s revenue share at TSMC due to the growing demand for AI GPUs. The business has reserved silicon and CoWoS capacity to guarantee a consistent flow of its high-end AI processors.

Whether AMD’s portion of TSMC’s net revenue will surpass 10% this year is still to be seen. Because of the company’s strong sales of datacenter-focused EPYC processors and the reportedly significant demand for its Instinct MI300-series AI and HPC products, AMD’s stake in TSMC’s profits may rise.

The rise in demand for AI GPUs might also have an effect on consumer-focused graphics cards like the upcoming GeForce RTX 5000 series based on the Blackwell architecture, which shouldn’t come as a surprise with most of the leading manufacturers relying on TSMC.

However, it won’t be long before the demand exceeds TSMC’s capacity to manufacture, which would eventually give rise to higher prices than last year and a shortage of consumer-focused graphics cards.

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