Nvidia (NVDA) has locked in over 70% of TSMC's (NYSE:TSM) advanced chip packaging capacity for 2025, according to a report from Taiwan's Economic Daily. The move highlights surging demand for AI chips, particularly Nvidia's next-generation Blackwell AI processors, as major tech firms ramp up AI infrastructure spending.

Key Takeaways:

• Nvidia's Dominance in AI Chips: The company has increased its share of TSMC's Chip on Wafer on Substrate (CoWoS) capacity from 60% (late 2024) to over 70% for 2025.
• Strong Demand from Hyperscalers: Tech giants Microsoft (MSFT), Google (GOOGL), Meta (META), and Amazon (AMZN) continue to boost AI-related capital expenditures, driving demand for Nvidia's chips.
• TSMC's Expanding Role: As the world's largest contract chipmaker, TSMC is scaling manufacturing and packaging operations to meet growing AI chip demand.
• U.S. AI Infrastructure Push: Increased U.S. efforts to build AI infrastructure could further benefit TSMC and Nvidia.

Impact on AI & Semiconductor Industry

• Nvidia's Earnings Report (Feb 21, 2024): Investors will closely watch NVDA's Q4 earnings to assess AI-driven growth trends.
• TSMC's Future Growth: As the sole mass-market provider of advanced chip packaging, TSMC is positioned to capitalize on AI chip expansion.
• AI Investment Surge Continues: AI hyperscalers' capital spending signals sustained demand for Nvidia's AI accelerators into 2025.

Investor Insights

• Revenue & Profit Growth: Investors can analyze Nvidia's Ratio to track AI-related revenue expansion.
• Stock Valuation: Insights from Key Metrics can help gauge Nvidia's valuation relative to AI market expectations.

Bottom Line

With Nvidia dominating AI chip production and securing the majority of TSMC's advanced packaging capacity, the company remains a cornerstone of the AI boom. Investors should monitor earnings reports, AI capital spending trends, and TSMC's expansion plans for further insights into Nvidia's long-term AI growth trajectory.