Apple and Taiwan Semiconductor: A Shift in Market Dynamics
Apple (NASDAQ: AAPL) has long relied on Taiwan Semiconductor Manufacturing (NYSE: TSM) for chip production, with Apple being its largest customer until recently. In 2023, Apple accounted for 25% of TSMC’s sales, decreasing to 19% by 2025. However, reports indicate that Nvidia (NASDAQ: NVDA) has now overtaken Apple as TSMC’s top client due to the growing demand for AI infrastructure.
Apple’s latest A20 Pro chip, featured in the iPhone 18 Pro and iPhone Duo, utilizes TSMC’s advanced 2-nanometer (nm) process, enhancing performance and energy efficiency compared to the prior 3-nm technology. Still, analysts forecast TSMC’s revenue to grow by 43% in 2026, far outpacing Apple’s projected 15% revenue growth for the same year. This discrepancy suggests a trend where TSMC is better positioned for growth in contrast to Apple’s more stagnant outlook.
Given the shifting client dynamics and growth projections, investing in TSMC may be more advantageous for investors compared to Apple, particularly as TSMC maintains a lower valuation while benefiting from the AI boom.
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