According to a new report from South Korea, TSMC will rapidly expand its market share by the end of this year. TSMC is the world's largest manufacturer of contract chips because it supplies semiconductors to most of the world's largest technology companies. The list includes Consumer Electronics giant Apple in Cupertino, Calif., and chip designer Advanced Micro Devices, Inc( AMD). In addition, TSMC has established partnerships with Intel Corporation and Qualcomm Corporation, both of which are important players in the modern semiconductor industry.
Now, it seems that the Taiwanese company will soon be responsible for providing NVIDIA with all of the latter's graphics processing units (GPUs). NVIDIA has already established a partnership with TSMC on some of its products, but problems with south Korean company Samsung FOUNDRy, the company's other chip supplier, are said to have forced it to switch entirely to TSMC.
Today's report isn't the first time we've come across rumors of a rift between Samsung and NVIDIA. NVIDIA is the world's largest GPU design company, and the company's diversification in emerging industries has made it the most valuable semiconductor company in the world in terms of market capitalization.
The first such report came at the end of last year, when a rumor from Chinese mainland put an outrageous price tag on NVIDIA's move to TSMC. In contract chip manufacturing, manufacturers often book orders months in advance in order to allocate limited capacity and customized production to meet customer needs. The rumor claims that NVIDIA will pay up to $7 billion to TSMC to ensure that its products can use TSMC's 5-nanometer (nm) process technology.
This rumor was followed by another report late last month that eventually revealed NVIDIA's data center GPUs. This will be fabricated on TSMC's 4nm process, which is part of a 5nm process enhanced variant, collectively known as the N5 technology family. Now, According to BusinessWeek, the transfer of Hopper GPUs in data centers to TSMC is just the beginning of Samsung's woes. The publication quoted industry insiders as saying that by the end of this year, almost all of NVDIA's products will be produced by chipmakers in Taiwan.
Accordingly, industry insiders expect TSMC to monopolize all GPU orders released by NVIDIA in 2022. Due to Samsung Electronics' low production, NVIDIA is struggling to sell its GeForce RTX 3000 series in 2020. NVIDIA has been outsourcing the production of data centers and consumer PC GPUs to TSMC until 2019. In 2020, it first selected Samsung Electronics as the production partner of the RTX3000 series GPU to reduce production prices and improve product competitiveness through diversified suppliers.
A complete shift to TSMC, if true, would be ironic, as NVIDIA had intended to retain some power over suppliers by diversifying as much as possible. TSMC and Samsung are the only two companies in the world that produce and sell chips made from advanced technology (under 7 nanometers) to other companies. NVIDIA has reportedly agreed to pay up to $10 billion to TSMC to jump into the ranks of the 4nm joint venture, and is said to be in talks with Intel about the latter's Intel Foundry Services (IFS) program, which would mark Intel's entry into the contract chip manufacturing industry as another player.
With the growth of the high-performance computing (HPC) segment and the increased demand for its products, TSMC launched its N4X chip technology in December. This is a variant of the 4nm node that will specifically meet the demand for HPC products and is expected to enter risk production in the first half of next year. HPC products are more complex than others because they require larger chips and higher yields, as well as other requirements from chip manufacturers.