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Investing.com-- NVIDIA Corporation (NASDAQ:NVDA) has secured more than 70% of contract chipmaker TSMC’s (NYSE:TSM) advanced chip packaging capacity for 2025, Taiwanese media reported on Monday, amid increased artificial intelligence demand for chips.
A report from Taiwanese newspaper Economic Daily- citing unnamed industry sources- said that increased demand for Nvidia’s next-generation Blackwell AI chips was strong, and that the firm had already contracted over 70% of TSMC’s Chip on Wafer on Substrate with silicon interposer capacity for 2025.
TSMC’s Taiwan shares trimmed some intraday losses after the report.
TSMC is currently the only mass market provider of advanced chip packaging processes- which involve combining multiple semiconductors into a single electronic device, and occurs at the fabrication stage. The company is also the world’s biggest contract chipmaker.
Reports in late-2024 showed Nvidia had already contracted at least 60% of TSMC’s advanced packaging capacity for 2025, as the company benefited from increased demand for AI data center chips.
Recent earnings reports from Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOGL), Meta (NASDAQ:META), and Amazon- Wall Street’s so-called AI hyperscalers- indicated that outsized capital spending on AI was set to continue in 2025- heralding strong demand for Nvidia.
This in turn is expected to translate into strong demand for TSMC. The company recently clocked stellar fourth-quarter earnings, and said it will ramp up its manufacturing and packaging operations in 2025 to meet increased AI demand.
TSMC is also expected to benefit from an increased push in the U.S. to build more AI infrastructure.
Monday’s report comes just days before Nvidia’s fourth-quarter earnings, which are due on Wednesday. The print will be closely watched as a bellwether for the broader AI and chipmaking industry.
Nvidia and TSMC could not be immediately reached for comment.