TSMC's customer dynamics are shifting as Nvidia likely overtook Apple as the top client in 2025, driven by explosive AI chip demand versus plateauing smartphone sales. Apple now faces higher prices and must compete for production capacity, though its broader product portfolio across multiple TSMC fabs provides long-term stability. TSMC is expanding cautiously with 32% capex growth to $52-56 billion, prioritizing new nodes like A16 for HPC workloads, while maintaining 62.3% gross margins. The foundry balances aggressive expansion against the risk of overcapacity if AI demand cools, a burden its fabless clients don't share.
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