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According to analysts in Taiwan, thanks to its deep collaboration with NVIDIA, TSMC achieved over US$10 billion (approximately RMB 71.846 billion at current exchange rates) in AI-related revenue in the second quarter of 2024. This underscores NVIDIA's growing importance in TSMC's customer roster, which was previously dominated by Apple.

TSMC released its second-quarter financial results last week, reporting total revenue of $31.7 billion, a year-over-year increase of 61%, driven primarily by robust demand for AI chips. The company also forecast that revenue for the current quarter will reach 32.4 billion USD, implying an annual growth rate of approximately 38% for the full year. Management noted during the earnings call that advanced process technologies for AI and high-end consumer electronics contributed as much as 74% of revenue in the second quarter.

Analysts estimate that one-third (approximately $10 billion) of TSMC's $31.7 billion revenue in the second quarter came from AI chips. If this trend continues throughout the year, TSMC's AI business sales in 2025 are expected to reach NT$868 billion, more than double the NT$434 billion recorded in 2024. Looking ahead to 2026, AI-related revenue is expected to continue growing at a high rate, further solidifying its position as a core growth pillar.

Dr. Wei Zhejia, Chairman and CEO of TSMC, clearly stated at the earnings conference that the company's expectation of achieving approximately 30% annual revenue growth in 2025 is primarily based on the demand for AI-driven high-performance computing (HPC) markets, particularly the widespread application of its 3-nanometre and 5-nanometre process technologies. Financial report data shows that 60% of revenue in the second quarter came from the high-performance computing sector, while smartphone-related business accounted for 27%.

Currently, NVIDIA is TSMC's primary customer for AI chip production. Its latest-generation GPU products utilise TSMC's 4-nanometre process technology, which, though two generations behind TSMC's current most advanced 3-nanometre process, remains at the global leading level. Notably, Apple remains the largest user of the 3-nanometre process, but as AI orders continue to expand, NVIDIA's importance is increasingly evident.

Additionally, TSMC is steadily advancing its research and development and mass production plans for more advanced processes. Following the 3-nanometre technology, the company expects to launch mass production of the 2-nanometre process by the end of this year.

Conclusion

TSMC's AI business growth highlights NVIDIA's central role in the AI computing power market and also reflects the accelerated development of global AI infrastructure. With the mass production of 2-nanometre technology and the expansion of CoWoS advanced packaging capacity, TSMC is poised to continue dominating the AI chip manufacturing market.