The Hidden Power Behind AI: Spotlight on a Key Nvidia Supplier

Published On: July 26, 2025 10:27 am

Nvidia Relies on Taiwan Semiconductor Manufacturing for AI Dominance

Nvidia (NASDAQ: NVDA) holds an estimated 80% market share in AI data center accelerators, facilitated by its partnership with Taiwan Semiconductor Manufacturing Company (TSMC) (NYSE: TSM). TSMC, the world’s leading semiconductor foundry, is crucial for manufacturing chips that power Nvidia’s AI processing units. Analysts from Bernstein predict Nvidia could represent over 20% of TSMC’s revenue in 2023, up from 5%-10% in prior years.

TSMC’s Expansion Plans

$38 billion to $42 billion, with about 70% earmarked for advanced AI chip technologies, indicating a strategy to meet the growing demand in the AI sector. By 2033, the global AI chipset market is projected to grow at an annual rate of 31%, highlighting TSMC’s potential for sustained growth and expansion in the industry.

Other Notable Customers

Aside from Nvidia, Apple (NASDAQ: AAPL) is also a major customer of TSMC, with expectations of equal contributions to TSMC’s revenue by 2025, as TSMC supplies chips for numerous Apple devices. Moreover, other firms like Qualcomm and Marvell Technology are also utilizing TSMC’s facilities, indicating the company’s pivotal role in the semiconductor market.