Nvidia’s most important supplier is posting record profits thanks to ravenous AI demand. That was the upshot from the latest earnings release from Taiwan Semiconductor Manufacturing Company, or TSMC, which used the occasion to say it doesn’t think major customers like Jensen Huang’s chipmaking behemoth will be scaling down their spending in 2025. TSMC’s stock jumped 5% Thursday after the company revealed net income rose 57% for the final quarter of 2024, while revenue increased 37% to nearly $27 billion.
While Nvidia’s graphic processing units are at the heart of AI trade, it outsources the manufacturing of those chips to TSMC, the king of the so-called “foundry business.” While Nvidia sells nearly 90% of the world’s GPUs, the Taiwanese company boasts a similar market share for producing the world’s most advanced AI chips, according to the U.S. Department of Commerce. While Nvidia’s stock is up roughly 140% in the past 12 months, TSMC's shares have been close behind, gaining more than 110% over the same period.
