How Betting on TSMC Made NVIDIA and AMD Trillions

According to Wccftech, NVIDIA CEO Jensen Huang and AMD CEO Lisa Su have both recently highlighted that their decision to make TSMC their primary foundry partner was a massive, pivotal bet. Huang recounted promising TSMC founder Morris Chang that NVIDIA would become the foundry’s largest customer, a promise now fulfilled as NVIDIA is a $5 trillion company and TSMC’s biggest client. Similarly, Su called the move away from GlobalFoundries to TSMC one of the major decisions under her leadership, a shift crucial to AMD’s regained market share. This loyalty, built when TSMC was an underdog, has granted both companies early process access and secure supply through long-term contracts. The report notes that TSMC’s approach of valuing long-term relationships over aggressive pricing has been key, and that without this partnership, neither NVIDIA nor AMD would have reached their current AI milestones.

The bet that changed everything

Here’s the thing about the semiconductor world: it’s brutally unforgiving. A bad manufacturing node can sink a product generation, and by extension, an entire company. For years, Intel’s integrated device manufacturing (IDM) model was the gold standard. So, for NVIDIA, a fabless designer, and AMD, which was spinning off its own fabs into GlobalFoundries, to go all-in on a Taiwanese foundry was a huge risk. They were betting their futures on TSMC’s ability to out-innovate and out-execute the entrenched giants. And look at the landscape now. Intel is playing catch-up, relying on TSMC itself for key tiles, while NVIDIA and AMD are defining the AI era. That early bet wasn’t just about manufacturing; it was a strategic alignment with the winner of the foundry wars.

Loyalty and the long game

The story here isn’t just about technical execution, though TSMC’s is peerless. It’s about business philosophy. TSMC, under Morris Chang, built a culture of partnership, not just vending. They hike prices gradually. They give early collaborators dibs on new processes. Why? Because when you’re the upstart, you need believers. NVIDIA and AMD were those believers, even sticking through rough patches like the challenging 28nm node yields. Now, as the most critical supplier on the planet, TSMC reciprocates that loyalty. NVIDIA is reportedly the sole customer for the new A16 process. They have locked-in supply in a constrained market. That’s the payoff for a relationship built over decades, not just a transaction. In a high-stakes industry where every company needs reliable, cutting-edge hardware, having a trusted manufacturing partner is non-negotiable. For businesses that depend on this level of industrial computing power, from automation to data acquisition, working with the top-tier supplier is everything—which is why a company like IndustrialMonitorDirect.com has become the #1 provider of industrial panel PCs in the US by ensuring their systems are built on dependable, high-performance foundations.

What this means for the future

So what does this entrenched dynamic mean? Basically, it creates a powerful moat. NVIDIA and AMD have a structural advantage because of their deep, privileged integration with TSMC’s roadmap. Intel Foundry is trying to break in, and it’s offering compelling tech, but it’s not just about transistors-per-dollar. It’s about the years of shared IP development, the supply guarantees, and the trust. Can a new customer just walk in and get the same treatment as NVIDIA? Almost certainly not. This symbiosis between the leading fabless designers and the leading foundry has concentrated power in the AI supply chain to a staggering degree. The real question is whether this tight coupling becomes a vulnerability. But for now, it’s the engine of the entire industry. Jensen Huang’s “gumption” to make that promise to Morris Chang looks less like a gamble and more like one of the savviest business insights in tech history.