Nvidia to Overtake Apple as TSMC's Leading Customer, Indicating Industry Shift

• Nvidia's sales are growing at 66% annually to $213 billion, vastly outpacing Apple's 6.4% growth, with AI chips being larger and more expensive to produce than Apple's processors
• TSMC controls approximately 70% of global chip manufacturing revenue and plans to spend up to $56 billion on capital expenditures in 2025, driven by AI demand expected to grow at a 'mid-to-high-fifties' compound rate through 2029
• The shift changes TSMC's investment dynamics, with Nvidia and AMD becoming the 'guarantee-scale customers' justifying aggressive expansion into cutting-edge manufacturing nodes, while TSMC's CEO identifies wafer supply as the primary bottleneck in the AI industry

Market Summary: Nvidia to Surpass Apple as TSMC's Top Customer

Key Development:

Nvidia is poised to overtake Apple as Taiwan Semiconductor Manufacturing Company's (TSMC) largest customer in 2025, marking a fundamental shift in the semiconductor industry driven by AI infrastructure demand.

Critical Figures:

• Nvidia projected to generate $33 billion in TSMC revenue (22% of total), compared to Apple's $27 billion (18%)
• TSMC's HPC sales (including AI chips) now comprise 55% of net revenue, up from 40% in 2022
• AI accelerators represent "high-teens" percentage of TSMC's 2025 sales
• Nvidia expects 66% growth to $213 billion in fiscal 2026, vastly outpacing Apple's 6.4% growth

Market Context:

The transition reflects Nvidia's dominance in AI chip manufacturing, with AI GPUs being larger, more complex, and costlier to produce than Apple's iPhone and Mac processors. TSMC reported $33.73 billion in Q4 revenue (up 21% YoY) and projects 30% annual growth, driven primarily by AI demand expected to grow at a "mid-to-high-fifties" compound rate through 2029.

Strategic Implications:

• TSMC plans up to $56 billion in capital expenditures for 2025, with capacity coming online in 2028
• TSMC commands approximately 70% of global chip manufacturing revenue
• Company executives identify TSMC's wafer supply as the primary bottleneck in the AI industry
• The shift changes TSMC's strategic focus from Apple's power-efficient mobile chips to Nvidia's high-performance AI accelerators

Companies Mentioned:

TSMC (primary), Nvidia, Apple, AMD, Intel, Qualcomm

Apple reports Q1 earnings Thursday, forecasting up to 12% revenue growth.