[Chip Talk] TSMC Backed by Apple and Nvidia... Expected to Surpass 60% Market Share

TSMC Stock Rises 44% Since Early Year
Active in Market Cap Ranking Following Nvidia
Apple Accounts for 25% of Last Year's Revenue

Taiwan's TSMC has climbed to 9th place in the global market capitalization rankings this month, backed by major clients such as Apple and Nvidia in the United States. As the foundry (semiconductor contract manufacturing) market grows this year, TSMC's market share is expected to exceed 60%. In June, the company faces a new challenge with an executive leadership change.

Recently, TSMC's stock price, listed on the New York Stock Exchange, has been rising continuously due to the impact of artificial intelligence (AI). The upward trend began in late October last year and has accelerated this year. On the 7th (local time), TSMC's closing stock price was $149.20 per share, up 5.39% from the previous day. Compared to January 2nd ($103.45), it surged 44.22%, and compared to November 1st last year ($87.65), it jumped 70.22%.

As the stock price follows an upward curve, the market capitalization is also increasing. TSMC's market cap reached $774.16 billion this month, ranking 9th globally. Although rankings fluctuate within the top 10 daily depending on stock prices, TSMC boasts the second-highest position among semiconductor companies, following U.S.-based Nvidia (3rd).

Significant Revenue Share from Apple and Nvidia

The background to TSMC's business growth lies in securing major clients. Last year, TSMC's revenue was 2,161.736 billion New Taiwan dollars (approximately 90.9226 trillion Korean won). Nearly 40% of this revenue came from Apple and Nvidia. According to TSMC's financial report, the top customer's contribution to total revenue last year was 546.55 billion New Taiwan dollars (25.28%), an increase from about 23% the previous year. The second-largest customer's revenue was 241.152 billion New Taiwan dollars, accounting for 11.16%.

The Taiwan Economic Daily explained, "TSMC's largest customer is likely Apple," adding, "Apple's use of self-designed chips and advancements in technology have continuously increased Apple's revenue contribution." It also noted, "With Nvidia emerging as a leading AI semiconductor company, it has likely become the second-largest revenue contributor."

The market outlook for TSMC's business this year is positive. AI demand continues to outpace supply, and the business prospects of major client Nvidia are optimistic. Another client, AMD, is actively pursuing AI semiconductor business, and MediaTek is a key player expanding the AI smartphone chip market, all of which support expectations for TSMC's performance growth.

Market research firm TrendForce recently reported that TSMC's share of the global foundry market will expand from 59% last year to 62% this year, a 3 percentage point increase. The overall foundry market size, which was $117.47 billion last year, is expected to grow by 12.08% to $131.655 billion this year.

The 'Wei Zhejia' Era Fully Begins This Year

TSMC is facing a major business transition with a leadership change this year. Chairman Liu Deyin is expected to step down in June, and Vice Chairman and CEO Wei Zhejia is set to be promoted to chairman following board approval. Chairman Liu has led TSMC alongside CEO Wei since 2018, after founder Zhang Zhongmou stepped down.

During this process, TSMC is simultaneously cultivating successors to follow CEO Wei Zhejia. Through recent organizational restructuring, Senior Vice Presidents Mi Weize and Hou Yongqing have been assigned to lead two core business areas. Mi Weize oversees operations, while Hou Yongqing manages research and development (R&D). Previously, Senior Vice President Chen Yongfei was responsible for these areas.

Industry insiders generally believe that this leadership change will not significantly impact TSMC's business. According to Reuters, James Huang, head of Franklin Templeton Securities Taiwan branch, stated, "TSMC's internal process for developing professional high-level talent is systematic and thorough," adding, "We do not expect the leadership change to have a clear impact on TSMC's operations or direction."