NVIDIA and AMD are two of the more dominant entities competing in the AI race, but Taiwan chip giant TSMC is actually getting most of the spotlight.
TSMC Expected to Be the "Center" of the AI Supply Chain Moving Ahead, With Every Manufacturer Relying On It
The demand for AI chips isn't coming down anytime soon, and with that, manufacturers like AMD and NVIDIA will see massive revenue figures in the upcoming months. More importantly, the whole supply chain will benefit the most. While both AMD and NVIDIA have a diverse network of suppliers, the chain merges into one entity, TSMC. The AI industry is expected to see hundreds of billions in chip orders, and in all that buzz, it is the Taiwan chip giant that will hold the most importance, supplying not only high-end nodes for accelerators, but also advanced packaging facilities. No one can ignore or compete with TSMC right now.
There's no doubt that TSMC is the only foundry that has managed to gain the industry's trust, particularly with its cutting-edge nodes. This has reflected in its revenue figures as well, as the firm reported a massive 61% YoY rise in second-quarter profit, hitting a record high and beating estimates. Such high figures doesn't come from being mediocre, rather since the start of the AI bandwagon, TSMC has been a primary driver of it, collaborating with the likes of NVIDIA and AMD to supply high-end equipment, and moving ahead, the growth momentum is expected to remain consistent.
A lot of next-gen AI products from NVIDIA will utilize TSMC's processes, which include Vera Rubin, that will utilize TSMC's 3nm process, along with the Feynman architecture that is rumored to feature the N2 technology. Similarly, at the consumer GPU front, NVIDIA is expected to leverage TSMC's nodes, which shows that the Taiwan giant has indeed dominated Team Green's supply chain, and despite NVIDIA's CEO Jensen Huang being open towards adding new foundry partners, it seems like there's no replacement to TSMC right now.
Similarly, AMD plans to revolve its next-gen Instinct AI lineup around TSMC's processes, including the Instinct MI350X lineup and the future Instinct MI400 series. Interestingly, despite Intel having its fab, the company will still look towards acquiring chips from TSMC, which indicates that the Taiwan giant's dominance is here to stay for a very long time. Considering that AI orders are expected to reach "trillions of dollars" in valuation with the upcoming years, one cannot estimate the magnitude of revenue coming at TSMC.
TSMC has been rapidly evolving its plans, mainly due to geopolitical tensions, which is why it has rapidly expanded its presence in America. The firm plans to transfer 2nm production into Arizona by the end of 2026, and when you realize that TSMC had "zero" production a few years ago in the US, it is fantastic to see the milestones the Taiwan chip giant has managed to rack up in minimal time. Indeed, there will be only one TSMC.
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