Nvidia Edges Apple for TSMC’s Leading Edge as AI Wins the Wafers

Read Articleadded Jan 16, 2026
Nvidia Edges Apple for TSMC’s Leading Edge as AI Wins the Wafers

TSMC is prioritizing AI chips as Nvidia’s demand surges, likely pushing Apple from the top customer spot in some periods and forcing it to fight for capacity and accept higher prices. Current and near-term nodes (N2P, A16) are optimized for HPC workloads, while a future A14 node could swing balance back toward Apple. TSMC’s record margins and massive capex come with high risk, so it’s expanding carefully despite outside pressure to scale even faster.

Key Points

  • Nvidia has likely overtaken Apple as TSMC’s top customer in some quarters and could do so for full-year rankings as AI demand soaks up leading-edge capacity.
  • TSMC’s mix is shifting toward HPC/AI (up 48% last year) while smartphone-related revenue grows modestly, pushing capacity toward GPUs with larger die sizes.
  • Near-term nodes (N2P, A16 with backside power) are best suited for HPC, favoring Nvidia/AMD; A14 (~2028) targets both mobile and HPC, likely improving Apple’s position later.
  • TSMC’s margins and capex are surging (62.3% gross margin; $52–56B 2026 capex), but it must expand cautiously due to high capital intensity and depreciation risk.
  • Critiques that TSMC isn’t scaling fast enough miss that fabless clients bear far less risk; TSMC carries the fixed-cost burden if demand cools when the AI boom flattens.

Sentiment

Overall, the Hacker News discussion largely affirms the article's premise that Nvidia is displacing Apple as TSMC's primary leading-edge customer due to the AI surge. However, the sentiment is pragmatic and critical rather than sympathetic towards Apple, frequently highlighting Apple's historical aggressive supplier practices and its vast financial resources, suggesting this is a natural market adjustment rather than an unfortunate plight for Apple. There's also significant debate on the article's tone, the long-term sustainability of the AI boom, and the potential for Intel to emerge as a viable alternative fab.

In Agreement

  • The shift of TSMC's leading-edge capacity towards Nvidia and AI customers is a natural market adjustment, driven by Nvidia's willingness to pay higher prices and TSMC's profit-driven business model.
  • TSMC's cautious approach to expansion, despite the AI boom, is a prudent strategy given the cyclical nature of the semiconductor industry and the risk of overbuilding capacity.
  • Apple has a historical reputation for being a demanding and ruthless customer with its suppliers, suggesting that any current capacity struggles are a consequence of market forces rather than a betrayal by TSMC.
  • Nvidia, while currently a massive driver of demand, also has a reputation for being difficult to work with, indicating that both major customers present challenges to suppliers.
  • The high margins on AI silicon allow companies like Nvidia to pay exorbitant prices for wafers, potentially leading to lower yield tolerance and different economic models compared to consumer electronics.
  • The article's framing of Apple 'fighting' for capacity is accurate given the increased competition, even if Apple has significant financial power.
  • The AI boom, though currently strong, may eventually flatten or hit diminishing returns, justifying TSMC's long-term view and careful investment.

Opposed

  • Apple's immense financial resources mean it should not be 'beholden' to a supplier; it could afford to outbid competitors or invest in its own fabrication capabilities if truly necessary.
  • The article's dramatic or 'novel-style' tone in reporting business facts is disliked, with some suggesting it's designed to generate engagement rather than objective information.
  • Intel's foundry services (e.g., 18A process) are rapidly catching up and could provide a viable alternative or diversification option for Apple's chip production in the near future.
  • Apple has a strong history of strategically managing supply chain transitions, such as moving away from Intel for CPUs, suggesting it is well-equipped to navigate current challenges.
  • The idea that the AI boom will flatten or hit diminishing returns soon is disputed, with some arguing that advancements are continuous and demand will remain high.
  • Apple's historical role as a stable, high-volume 'anchor tenant' for TSMC, particularly for smaller dies and mature yields, is valuable and shouldn't be overlooked in favor of concentrated, volatile demand.
  • Concerns about geopolitics, such as China's potential invasion of Taiwan, overshadow current capacity issues and represent a much larger existential threat to global chip supply that current market dynamics don't fully address.