TSMC Just Handed Nvidia 77% of Its AI Capacity—Here's Why
The upstream play everyone's missing while chasing Nvidia...
Hey,
Nvidia grabs all the headlines with its 80% AI accelerator market share and $35.6 billion Q4 data center revenue.
But Taiwan Semiconductor Manufacturing now allocates 77% of its AI-focused silicon wafer capacity to Nvidia in 2025, up from just 51% in 2024—creating massive ripple effects through the entire semiconductor value chain.
With Nvidia projecting $3-4 trillion in AI infrastructure spending through decade’s end, the opportunity extends far beyond the chip giant everyone’s chasing. Access full story here.
-Christopher
P.S. xAI’s Colossus facility alone deployed 150,000 H100 GPUs, 50,000 H200 GPUs, and 30,000 GB200 GPUs by June 2025, with plans to scale to 1 million GPUs. You really need to read this before it’s too late.
The 77% capacity allocation to Nvidia is pretty stunning when you think about it - that's a massive customer concentration risk for TSMC even though it's also their biggest growth driver. What makes this even more facinating is that this isn't just about Nvidia's dominance in AI accelerators, it's also showing how TSMC's CoWoS packaging bottlenecks are being prioritized for Nvidia above other customers. If there's any hiccup in AI demand or if Nvidia loses market share to AMD/custom chips, TSMC could end up with serious utilzation issues. Still, given the xAI numbers you mentioned with 1 million GPU plans, the bet probably makes sense short-term. Just feels like TSMC is putting a lot of eggs in one basket even for a company that usually plays it conservitive.