Nvidia plans to replace Apple as TSMC’s biggest customer

Decades ago, when Jensen Huang first met Morris Chan, he said: Taiwan Semiconductor Manufacturing Co., Ltd. One day Nvidia It will be the chip foundry’s biggest customer.

That’s Mr. Huang. Nvidia’s The CEO was asked about this on a recent podcast, and this is a promise he plans to deliver this year.

Nvidia will become TSMC’s biggest customer this year, according to analyst forecasts and Huang himself. apple is currently considered to be TSMC’s largest customer, primarily producing A-series chips for iPhones and M-series chips for PCs and servers.

This exchange of positions would reflect NVIDIA’s growing importance in building artificial intelligence infrastructure and signal a fundamental shift in the semiconductor industry.

In a podcast released this month, Huang said the switch is already happening.

“Mr. Morris will be pleased to know that Nvidia is now TSMC’s largest customer,” said Mr. Huang, adding that he was personally very happy about this milestone.

Ben Bajarin, principal analyst at Creative Strategies, said he expects NVIDIA to generate $33 billion in revenue for TSMC this year, about 22% of the chip foundry’s total revenue. By comparison, Apple is expected to generate about $27 billion, or about 18% of TSMC’s revenue.

“The scale of this has changed dramatically,” Bajarin said. “A few years ago, we found out how much capacity Nvidia was demanding from TSMC.”

Nvidia and TSMC declined to comment. Apple did not respond to a request for comment.

Apple is scheduled to report first-quarter results on Thursday, and the company expects sales to increase by up to 12% in the quarter.

TSMC did not discuss the ranking of its 522 customers, but added that its top 10 customers accounted for 76% of the company’s net revenue in March, and its largest customer at the time accounted for 22% of its net revenue. The second largest customer accounted for 12% of net revenue.

Nvidia’s influence is evident in the chip foundry’s financials.

In fourth-quarter results released earlier this month, TSMC’s HPC sales, including Nvidia’s AI chips, accounted for 55% of its net revenue. This is up from 40% in 2022, when the AI ​​boom began with the launch of OpenAI’s ChatGPT. Currently dominated by Nvidia, AI accelerators account for a “high teen” of TSMC’s 2025 total revenue.

Nvidia’s sales are growing rapidly, outpacing Apple’s growth. Nvidia is expected to report in February that its revenue will rise 66% to $213 billion for its 2026 fiscal year, which ends this month. Apple’s growth rate for fiscal year 2025 (ending September) was 6.4%.

Additionally, Nvidia’s AI chips are larger and more complex to manufacture than those made by Apple, which means they cost more.

The transition also highlights TSMC’s role as the world’s largest contract supply foundry, providing chip manufacturing and related services to nearly all processor manufacturers, including: advanced micro device, intel, broadcom and Qualcomm.

TSMC commands an estimated 70% of the total market in chip manufacturing revenue, according to market research firm TrendForce. Rival Intel has said it wants to make its main node chips in the United States but has not yet announced a major customer, and its stock fell 13% on Thursday after reports of a weak first-quarter outlook and production concerns.

Huang understands the importance of TSMC’s supply to Nvidia.

He visited Taiwan five times last year. In November, he attended the foundry’s annual sports day wearing the same red shirt as TSMC employees. On that trip, he also reportedly visited a TSMC factory equipped with the 3-nanometer technology used to make Nvidia’s Rubin chips, which are in full production and expected to ship later this year.

TSMC’s latest quarterly results showed how the company’s business is being transformed by demand for artificial intelligence chips. Company executives said they are considering expanding investment in additional plants, but are acting cautiously.

TSMC reported net revenue of $33.73 billion in the December quarter, up 21% on an annual basis, and expects sales to rise 30% this year. This strong forecast is driven by TSMC’s success with AI chips, which the company expects to grow at a compound growth rate in the “mid-to-high 50s” through 2029.

“Our customers, who are primarily cloud service providers, are also sending strong signals and reaching out directly to request capabilities to support their businesses,” TSMC CEO CC Wei said, according to a transcript of TSMC’s earnings call earlier this month. “Therefore, our confidence in the multi-year AI megatrend remains strong.”

TSMC said it plans to spend up to $56 billion in capital spending this year and expects it to increase to capture AI demand, adding that investments made this year will ramp up in 2028. Still, the company remains conservative about its long-term forecasts, which could extend into the next five years.

When asked about the AI ​​bubble, Wei said, “I’m definitely very nervous about it too,” according to the transcript. “Because you have to invest about $52 billion to $56 billion in CapEx, right?”

TSMC and Apple have a close relationship because the volume of the iPhone chip is smaller than the AI ​​graphics processing unit and therefore the price per unit is lower. The stability of this relationship has allowed TSMC to aggressively invest in new capacity in cutting-edge technologies called “leading nodes.”

Apple wanted the latest production node because the more advanced the manufacturing process, the more power efficient the chip will be, which will improve the battery life of its devices. But the power efficiency of modern nodes is also important to Nvidia. That’s because energy is an input to the return on investment in AI systems.

“It just changes the dynamic where Apple, which was the driving force behind TSMC, has now shifted to Nvidia and to some extent AMD. AMD is like a guaranteed-scale customer that helps justify the increased capex with each new node,” Bajarin said.

Apple will continue to need large quantities of chips from TSMC, but Nvidia was the only customer whose products were mentioned in the Taiwanese company’s earnings call.

“My customers, product improvements continue to increase,” Wei said. “From Hopper to Blackwell to Rubin, it’s well known that their performance almost doubles and triples.”

Wei added that from his perspective, the bottleneck in the AI ​​industry remains “TSMC’s wafer supply.”