00:00 Speaker A
Nvidia is expected to surpass Apple as TSMC’s largest customer in 2026, a shift that could reshape the chip industry and allow us to introduce more chips now.
00:10 Speaker A
Ben Bajarin, CEO and principal analyst at Creative Strategies. Ben, my friend, nice to meet you. So, let’s dive in, Ben.
00:15 Speaker A
Ben, you have this new post on Substack, and you make this interesting point in Substack. You said that you saw Nvidia surpassing Apple to become TSMC’s largest customer. Ben, please walk us through that and what you’re saying in it. What’s the trend?
00:29 Ben Bajarin
Yeah, so I think that’s inevitable for a while. I mean, anybody who’s been paying attention to customer revenue contribution, probably over the last year has seen how much revenue Nvidia has made and why they’re on track to basically overtake Apple. Well, they’re very close, I think, you know, they do become TSMC’s largest customer by revenue in 2026, right?
00:46 Ben Bajarin
I think this shift signals something different. If you just look at TSM’s TSMC earnings, you see a shift toward HPC, so HPC is the vast majority of their revenue and it’s only going to continue to grow.
01:00 Ben Bajarin
Well, that’s a big shift from the mobile era, right? Apple is really a major customer, producing wafers for iPhones, uh iPads and Macs and so on, and we’re in the AI accelerator space that’s starting to take up more capacity and really drive some of the huge constraints that we’re seeing across the board in the semiconductor space.
01:25 Ben Bajarin
So this is really just a structural change, a sign of the times. Well, you know, Apple is still tied to TSMC, uh, very significantly in terms of wafer consumption, but the wafers, the work, the progress, the capacity and the capex that TSMC needs to do for uh Nvidia and other companies is very different than what they’ve done for Apple over the past 10 years.
01:47 Speaker A
So let me ask you, Ben, if I were an Apple investor and I was listening to this, okay, TSMC’s new biggest customer, Nvidia instead of Apple. Ben, how do I explain this? Should I be sending a signal that Apple is somehow less prioritizing TT-TSMC?
02:00 Ben Bajarin
No, I don’t think so. I think they’re again strategic priorities in different ways, right? So Apple makes, you know, monolithic chips, right? So there’s only one chip per device, right? as part of the overall wafer. So this process is not going away. When you look at what Nvidia does, it’s a multi-step process. GPUs are much larger per wafer, and because they use advanced packaging, there are more steps required from GPU to GPU packaging, right? That’s the case with Nvidia’s products.
02:18 Ben Bajarin
So, I think they’re still important. Well, it doesn’t change the shape of Apple’s growth direction either. Demand for Apple products remains across the board. We don’t think this situation has changed at all. Well, I think that just shows the diversity that TSMC is getting into right now.
02:35 Ben Bajarin
And, I think a bigger question is, will Apple start looking at other sources again? Well, you know, Intel comes up again, right, as a foundry, you know, potential option for some Apple products, obviously not mainline products. But we’re faced with supply-constrained manufacturing in the environment and in the foundries, which just creates challenges for everyone, right?
03:00 Ben Bajarin
This is true for Nvidia, and it is true for Apple, they need to control this supply chain. So that’s really another structural sign of the era we’re in relative to artificial intelligence, but I don’t think it’s going to change Apple’s priority over TSMC.
