For several years, Apple has held the title of TSMC's largest customer. However, recent trends suggest that this status may soon change as Nvidia's demands continue to grow. In 2024, Apple accounted for 25.2% of TSMC's annual revenue, while Nvidia generated 10.1%. With its expanding client base and increasing reliance on TSMC for chip manufacturing, Nvidia is well-positioned to challenge Apple's dominance.
The analysts at Citi Securities project strong growth for TSMC over the next couple of years, fueled by the rising need for specialized AI-based ASIC (Application-Specific Integrated Circuit) chips. By the end of 2025, many AI chips are set to be manufactured using TSMC's advanced 3nm node, likely leading to higher average selling prices for the company's silicon wafers and bolstering profits.
Despite facing increased competition, Apple remains a vital customer for TSMC. Reports indicate that Apple has already secured the entirety of TSMC's 2nm production capacity for its upcoming A20 and A20 Pro processors, which are expected to be featured in the 2026 iPhone 18 series.
TSMC is optimistic, anticipating annual revenue growth of 20% to 25%, and expects gross profit margins to exceed 50%. The firm's growth is anticipated to receive a boost from the rising demand for on-device AI chips, offering enhanced security compared to conventional cloud-based AI solutions. Regardless of how the customer dynamics evolve, Nvidia is set to significantly benefit from the AI industry’s growth.
As the semiconductor landscape continues to evolve, the potential for Nvidia to overtake Apple as TSMC's leading customer raises intriguing questions about the future of the tech industry.
