TSMC chairman not worried about AI competition as “they will all come to us in the end”
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AI has been taking over the graphics card market, demanding so many chips that it has easily become the top seller for any brand. Just looking at Nvidia’s revenue report, it is the majority of its revenue for the past quarter and rising still, but the manufacturing company behind all the silicon production faced some concerns regarding its demand and sales.
As the geopolitical situation meant a great loss in revenue for Nvidia, as outlined in a report, due to a lack of H20 sales. In a similar vein, TSMC’s recent shareholders meeting answered many concerns as to an oversupply. As Nvidia couldn’t sell its stock, would it be worried that this trend will continue into the next year, with producing more silicon wafers than it can sell?
That’s where Chairman Wei Zhejia talks about how it is managing its production. As he admitted that TSMC did face overcapacity in 2023, it had learned from its mistakes and emphasized that the company would be more careful and thorough than before.
He also says that when planning AI production capacity, it goes beyond talking to its customers; it also goes to their customers. That way, it knows what to expect and the kind of numbers it can sell. Talking to cloud service providers to ensure their decisions are in line with the kind of numbers that will be required.
“We don’t just ask customers about their needs, we also ask their customers. For example, we will communicate directly with CSPs such as Google, Amazon, and Facebook and discuss the information again.”
Wei Zhejia, Chairman of TSMC, source: United Daily News [translated]
TSMC’s silicon monopoly
After all, TSMC is one of the major silicon producers. As it gets hit with issues, that shockwave is seen throughout the market, as so many companies utilize its facilities. To try and mitigate this sort of issue, it has been expanding its production, as even its new US factories get overwhelming demand.
With all that, plenty of investors talk of concern about which AI design company will win out, and if TSMC will need to make a choice, that’s where the Chairman puts it clearly.
“GPU is also made at TSMC, and ASIC is also made at TSMC. We don’t need to judge who will win, because they will all come to us in the end.”
Wei Zhejia, Chairman of TSMC, source: United Daily News [translated]
Overall, TSMC doesn’t need to worry about who it will produce for, but rather making sure that it doesn’t overproduce. Instead of working with CSPs and customers, the long-term cooperation ensures that it can match what the industry needs. That way, it can prepare and deliver accurately.
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