Apple Is Fighting for TSMC Capacity as Nvidia Takes Center Stage

4 months ago

Apple is struggling to secure TSMC's chip production capacity as it competes with Nvidia for wafer supply.
TSMC CEO CC Wei informed Apple of significant price hikes during a visit to Cupertino, reflecting TSMC's increasing pricing power.
Nvidia likely surpassed Apple as TSMC's largest client in at least one or two quarters last year, driven by the AI boom.
TSMC's revenue grew 36% in 2023, with high-performance computing (HPC) sales, including AI chips, surging 48%, while smartphone revenue grew only 11%.
Apple's role as TSMC's primary revenue growth driver ended five years ago, with Nvidia now leading due to skyrocketing demand for AI chips.
TSMC plans to increase capital expenditure to a record $52-$56 billion in 2026, focusing on advanced nodes like 2nm (N2), N2P, and A16.
Apple's chip portfolio is broader and more varied, ensuring its long-term importance to TSMC, despite Nvidia's current dominance in leading-edge wafers.
TSMC's business model involves building new fabs for new nodes, ensuring no interruption to output and maximizing efficiency of older processes.
The AI boom's eventual slowdown may shift the balance back to Apple, as TSMC's A14 node is designed for both mobile and HPC applications.
TSMC faces criticism for not expanding capacity fast enough, but its high capital intensity and depreciation costs make rapid expansion risky.

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