NVIDIA is the leading designer of AI and graphics chips. The company doesn't have its own foundry so it needs to get the chips it's designed manufactured by a foundry. The bulk of NVIDIA chips are made by TSMC and Samsung has long been trying to steal some market share away from the dominant player in the market.
TSMC's production capacity has been booked long in advance and its customers also have to factor in geopolitical risks stemming from tensions between China and Taiwan. Naturally, that leaves Samsung as the only major alternative, as it's the second largest foundry after TSMC.
Disruptions at TSMC could be Samsung's gain
Speaking at the Goldman Sachs Communacopia and Technology Conference, NVIDIA CEO Jensen Huang said that NVIDIA is open to using companies other than TSMC to manufacture its GPUs, while acknowledging the growing tensions between the two countries.
We use them (TSMC) because they're great, but if necessary, of course, we can always bring up others,” Huang said, adding that NVIDIA uses TSMC not because it's the world's best but that “it's the world's best not by a small margin, it's the world's best by an incredible margin.”
However, if necessary, NVIDIA can shift to another fab. He acknowledged that maybe the process technology won't be as good as TSMC's or the same level of performance and cost may not be achieved, but that would still enable NVIDIA to ensure supplies, even if TSMC were to face disruptions due to a geopolitical event.
While Huang didn't specify Samsung as the alternative to TSMC, it's really the only other option when you consider the process technology and scale. It has adopted the GAA technology for its 3nm and 2nm processes, and is actively trying to lure major customers like NVIDIA away from TSMC. Despite all its efforts, TSMC retains an almost 62% hold over the global foundry market while Samsung is in a distant second place with 11% of the share.
