TSMC’s top-10/20/30/40 customers; Who spends how much on TSMC? Apple revenue; Top-10 customer dynamics

TSMC, the world's largest semiconductor foundry, served 532 customers in 2022.  However, its top-10 customers accounted for 68% of its revenue.  Apple, the largest customer, accounted for 23% of TSMC's revenue.  In this post, I address which company contributed how much income to TSMC, the top-10 customer revenue trend and Apple's revenue concentration.

TSMC's Apple revenue grew 18.2% in CY2022 to $17.5 b, while non-Apple revenue grew 33.4%.  Also, the company's average revenue per top-10 customer grew 28% to $5,160.

The company's top-10 customer concentration has hovered around 70-75% for the last few years.  While higher customer concentration may seem like a risk, in TSMC's case it has proved to be an advantage with steady and predictable revenue streams.  Also, worth noting that TSMC generates more than 50% of its revenue from advanced nodes (N7 and below).  It is not easy for semiconductor companies to dual source on advanced nodes; only a handful of companies (Qualcomm and NVIDIA) do that.

In addition, TSMC gets 80% of its revenue from smartphone and HPC customers.  So, unsurprisingly, the company is heavily exposed to companies that operate in this area, including Apple, AMD, Broadcom, Marvell, MediaTek, NVIDIA, Qualcomm etc.

Here is my attempt to identify TSMC's customers, who accounted for more than 80% of its revenue in 2022.  I will try to separate more customers in future iterations.

The company's top-10 customers include Apple, Qualcomm, AMD, Broadcom, NVIDIA, MediaTek, Intel, Marvell, NXP and Unisoc.  Qualcomm became the second largest customer for TSMC, driven by N6/N5/N4-based chips and broader automotive and IoT segment exposure.  Qualcomm spent $15b+ on foundry in CY2022; the lion's share went to TSMC and Samsung.  AMD (includes Xilinx) primarily sources 7nm and below wafers from TSMC.  Xilinx sources 16nm/28nm and below nodes-based wafers from TSMC for its FPGA products.  On the other hand, Broadcom sources 75% of its wafers from TSMC for its wireless, networking, broadband and storage products.

Despite its dual sourcing from TSMC and Samsung, NVIDIA has a sizeable business with TSMC and its latest H100 is built on TSMC's N4 node.  Moreover, NVIDIA will likely increase its spending with TSMC in 2023, driven by increased demand for generative AI products (GPU and networking). 

MediaTek, the second largest smartphone chip vendor, is also highly dependent on TSMC and sourced 61% of its wafer by value from TSMC in 2022, down from 63% in 2021.  By my estimate, MediaTek dropped from the second-largest customer in 2021 to the sixth-largest customer in 2022.

TSMC also has a sizeable business with image sensor companies Sony and Omnivision. TSMC's Japan JV with Sony will be operational by the end of 2024, offering 55,000 wafers per month capacity on 16nm/22nm/28nm nodes.

The company also serves hyperscalers like Amazon, although most hyperscalers contract TSMC through their ASIC vendor (Broadcom, Marvell etc.).

TSMC currently lacks a significant presence in compound semis though its tripled its GaN capacity in 2022.  The company serves various speciality technology clients in RF, MEMS, display drivers, auto, image sensors etc.  I estimate that speciality tech accounted for 35%+ of TSMC's wafer capacity and 25%+ of its total revenue in 2022.  The company also serves academic customers who tape out test chips for research purposes.

I hope the post explains who spends how much with TSMC.  I have done my homework on this, of course.  But I must say this is still my version 1, and I will refine these estimates further as I get feedback from people.

Disclaimer: This is not investment advice.  All opinions are mine only.