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Investing.com -- Nvidia is set to become as large a customer as Apple (NASDAQ:AAPL) for Taiwan Semiconductor Manufacturing Co this year, as the chipmaker’s AI-driven growth accelerates.
Apple is not shrinking in importance, but Nvidia (NASDAQ:NVDA) is expanding rapidly. Bernstein estimates Nvidia’s contribution to TSMC’s revenue will grow from 5-10% in 2023 to the low-20s% in 2025, matching Apple’s share.
TSMC’s AI and backend business, particularly advanced packaging, are key growth drivers, the brokerage said, forecasting that AI will account for more than 20% of TSMC’s total revenue this year. The company is expected to navigate changes in production schedules across Nvidia's Blackwell, Blackwell Ultra, and Rubin chips while maintaining full capacity.
Bernstein projects TSMC’s earnings per share to grow 40% this year, with data center AI revenue rising from 6% of total revenue in 2023 to 14% in 2024 and over 20% in 2025.
While Nvidia's GPU business remains dominant, with GPUs expected to make up two-thirds of TSMC’s AI-related demand this year, the rise of ASIC chips—led by Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOGL) is a long-term trend.
Bernstein highlighted TSMC’s growing presence in backend services, predicting it will surpass ASE Technology Holding Co (NYSE:ASX) Ltd to become the world’s largest outsourced semiconductor assembly and test provider this year.
The firm maintained an "Outperform" rating on TSMC, setting a one-year price target of NT$1,430, implying a 30% upside.
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