Nvidia Overtakes Apple as TSMC's Largest Customer in Historic Industry Shift

Confirmation from Nvidia's CEO

Jensen Huang, Nvidia's chief executive officer, confirmed the milestone during an appearance on the A Bit Personal podcast with Global Semiconductor Alliance CEO Jodi Shelton. Huang referenced a conversation with TSMC founder Morris Chang from Nvidia's early days, noting that Nvidia were TSMC's largest customer during the PC revolution and have reclaimed that position. While TSMC's chief financial officer declined to confirm the change in client rankings, industry data supports the shift.

Revenue Data Reveals Transformation

TSMC reported 36 percent revenue growth to 122 billion dollars for 2025, with its high-performance computing segment climbing 48 percent while smartphone revenue grew just 11 percent. Nvidia now accounts for approximately 13 percent of TSMC's revenue, up from 11 percent in 2024. Apple's share fell from 25 percent at its peak to approximately 20 percent in 2025. The transition reflects artificial intelligence infrastructure spending eclipsing smartphone growth as the primary driver of advanced chip demand.

Impact on Apple

The changing dynamics have tangible consequences for Apple. In August of last year, TSMC CEO CC Wei visited Apple's headquarters in Cupertino to deliver news of the largest price rise in years. Apple must now compete for production capacity as Nvidia's graphics processing units command larger wafer footprints. TSMC has announced price increases of 3 to 10 percent across advanced nodes for 2026, with 2 nanometre chips expected to cost at least 50 percent more than their 3 nanometre predecessors. The chipmaker projects capital expenditure of 52 to 56 billion dollars this year and expects revenue growth of close to 30 percent.

Structural Industry Shift

Industry analysts characterize the transition as structural rather than cyclical. Research firm Gartner reported that Nvidia became the first company to surpass 100 billion dollars in annual semiconductor revenue in 2025, reaching 125.7 billion dollars with 63.9 percent growth. Artificial intelligence semiconductors now account for nearly one third of total industry sales, with infrastructure spending forecast to exceed 1.3 trillion dollars in 2026.

Long-Term Partnership

Nvidia's relationship with TSMC spans decades, dating back to the company's early days. Huang recently stated that without TSMC, there would be no Nvidia today, describing the Taiwanese manufacturer as the pride of Taiwan and the world. The partnership has weathered multiple technology transitions, from the PC revolution through gaming and now into the artificial intelligence era.

Market Implications

The demand for advanced silicon is no longer cyclical but structural, according to market analysis. As every industry integrates large language models and generative AI into their core operations, the need for specialized chips that only TSMC can manufacture at scale continues to grow. This positions TSMC at the centre of the artificial intelligence boom while forcing traditional technology giants like Apple to adapt to a new competitive landscape for manufacturing capacity.

Looking Ahead

The shift in customer rankings represents more than a change in TSMC's client list. It signals a broader transformation in the technology industry, where artificial intelligence infrastructure has become the dominant force shaping semiconductor manufacturing priorities. With Nvidia's demand showing no signs of slowing and other companies like Broadcom also competing for capacity, the competition for access to TSMC's most advanced manufacturing processes is expected to intensify throughout 2026 and beyond.