Nvidia could oust Apple as TSMC’s top customer

For years, Apple has remained Taiwanese TSMC’s biggest customer. That’s no surprise: the world’s leading contract fab has produced A-series processors for the iPhone and iPad, as well as M-series chips for some iPad and Mac models. TSMC is also producing Apple-developed 5G modems, which are rumored to replace the Snapdragon 5G modems in the iPhone SE 4 and iPhone 17 Slim.

An Apple-designed 5G modem that will replace the Snapdragon 5G modems in the iPhone SE 4 and iPhone 17 Slim.

New balance of power: Nvidia may be ahead of Apple

In 2024, Apple contributed 25.2% of TSMC’s annual revenue, while Nvidia provided 10.1%. However, analysts at Citi Securities predict that growing demand for artificial intelligence chips could allow Nvidia to take the top spot among TSMC’s customers, surpassing Apple. Nvidia’s contribution to the company’s revenue could be around 20% this year, which would significantly reduce Apple’s share of total turnover.

Nvidia’s broad customer base

Nvidia serves a huge number of customers, and as its business grows, TSMC’s order volume could increase significantly. This could cement Nvidia as TSMC’s top customer.

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The Role of AI in TSMC’s Growth

According to analysts at Citi Securities, TSMC expects significant growth in the next two to three years due to strong demand for specialized ASIC chips based on artificial intelligence. By the end of 2025, the majority of such chips will be produced using 3nm process technology. This will lead to an increase in the average cost of silicon wafers and, as a result, the company’s profits.

Apple remains a key customer

Despite Nvidia’s rapid growth, Apple will continue to play an important role in TSMC’s business. Apple has reportedly already reserved all of TSMC’s 2nm process manufacturing capacity to produce the A20 and A20 Pro processors, which are expected to be used in the iPhone 18 series in 2026.

Apple has already reserved all of TSMC’s 2nm process manufacturing capacity to produce the A20 and A20 Pro processors, which are expected to be used in the iPhone 18 series in 2026.

TSMC’s outlook for 2025

TSMC plans to grow revenues by 20-25% this year, keeping gross margins above 50%. An important growth driver is expected to be the production of chips for smartphones and PCs with embedded AI. This approach is considered safer than using cloud-based data solutions. However, cloud-based AI still remains the dominant way of processing information on personal computers and smartphones.

At the same time, cloud-based AI is still the dominant way of processing information on personal computers and smartphones.

Possible TSMC customer move to Samsung

The rise of Nvidia won’t necessarily mean changes for TSMC, however. Nvidia and Qualcomm are both rumored to be considering a move to Samsung Foundry fabs, despite the Korean company’s past problems with low yields of its current chips.

Samsung Foundry

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