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NVIDIA Seeks to Cut Ties with TSMC—Samsung Set to Step In

Daniel Kim Views  

Yonhap News Agency

Reports have emerged that NVIDIA, a leader in artificial intelligence (AI) chips, is exploring a potential partnership with Samsung Electronics to reduce its reliance on TSMC, the world’s largest chipmaker.

According to the U.S. tech outlet The Information, NVIDIA is in talks with Samsung to manufacture a new gaming chip that is simpler to produce than its latest AI chips. The discussions reportedly include pricing negotiations, with NVIDIA seeking a 20-30% discount compared to TSMC’s rates for similar technology.

Since their first partnership in 1995, NVIDIA and TSMC have maintained a 30-year relationship. NVIDIA has relied heavily on TSMC to produce advanced AI chips in response to skyrocketing demand. Last year, NVIDIA made up 10% of TSMC’s total revenue, second only to Apple. However, tensions between the two companies reportedly emerged, particularly over production defects in Blackwell, which was announced earlier this year. Although NVIDIA recognized the defects during the design phase, TSMC allegedly rushed the production process, causing further issues.

NVIDIA had planned to release the next-generation AI chip Blackwell within the year, but production delays due to packaging defects were reported in August. These setbacks have raised concerns among major tech firms that had planned large orders for Blackwell GPUs to power AI data centers, potentially disrupting investments in AI infrastructure.

In addition to production issues, NVIDIA is said to be dissatisfied with TSMC’s pricing policies. TSMC has been known to increase fees for customers who switch to other foundries and then return, forcing NVIDIA to comply with price hikes while relying on TSMC for production.

Daniel Kim
content@viewusglobal.com

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