Major ClientsNarrow moat

TSMC (TSM) — moat facet

Ten customers are 78% of revenue and rising, and in 2025 the largest one changed for the first time in a decade.

TSMC's 20-F discloses its customer concentration in unusual detail, and read across three years it tells a story its own commentary does not. Its ten largest customers accounted for 70% of net revenue in 2023, 76% in 2024 and 78% in 20251. Concentration is not merely high; it is increasing.

Ten largest customers, share of net revenue (%)70%202376%202478%2025TSMC warns its customers’ own consolidation may raise concentration further.
Concentration is not merely high — it has risen in each of the last three years.

The composition changed more than the total. TSMC's largest customer fell from 25% of revenue in 2023 to 22% in 2024 and 19% in 2025, while its second largest rose from 11% to 12% to 17%. In the segment note, a customer that had been below the 10% disclosure threshold in 2023 appears at 12% in 2024 and 19% in 2025, overtaking the long-standing leader, which fell to 17%2. TSMC names neither. But a customer that materialised in 2024 and nearly doubled its share in a year, in the year AI accelerators consumed the leading edge, is not hard to reason about — and the company it displaced had been TSMC's largest for a decade.

The company is candid about why. Its filing notes that its customer profile has changed dramatically with the structural shift to high-performance computing, and that there are only a limited number of customers successfully exploiting that model. Concentration is not a failure of sales effort; it is what happens when the frontier gets expensive enough that only a handful of firms can afford it.

The existing moat pages argue that this concentration is offset by stickiness, and that remains true. These four pages take up what the stickiness does not cover: which customers, moving in which direction, what they are being charged, and what happens when the customers stop being chip companies at all.

Moat trajectory: Narrowing

Concentration rose in each of the last three years — 70%, 76%, 78% from ten customers — and TSMC states that its customers' own consolidation may push it further. The composition shifted at the same time, with the largest customer overtaken by a buyer whose orders track hyperscaler capital spending rather than a consumer product cycle. Both changes make revenue more dependent on fewer, faster-moving decisions. The stickiness that offsets it is real and unchanged, which is why this is narrowing rather than deteriorating.

The number that tests this moat
Reported
Share of net revenue from the ten largest customers
78%, from 76% and 70%

Concentration is rising, and TSMC warns that its customers' own consolidation may push it further. The composition changed too: the largest customer fell from 25% to 19% while the second rose from 11% to 17%. Watch the ten-largest figure and the top-two gap together.

Source: TSMC Form 20-F, FY2025 (customer concentration risk factor) ↗
Dig deeper
DIG DEEPER 01
The Largest Customer Changed
One customer fell from 25% to 17% while another rose from under the 10% disclosure line to 19% — the smartphone era handing over to the accelerator…
DIG DEEPER 02
Ten Customers, Seventy-Eight Percent
Seventy, then seventy-six, then seventy-eight percent from ten buyers — and TSMC warns its customers' own consolidation will push it higher.
DIG DEEPER 03
The Customers Who Stopped Being Chip Companies
TSMC's customers increasingly aren't chip companies at all, which uncaps their orders and re-couples TSMC's revenue to hyperscaler capital budgets.
DIG DEEPER 04
Four Years of Price Increases, Announced in Advance
A supplier that tells customers to expect price rises every year until 2029 is not negotiating — it is scheduling.
References
  1. ReportedTen largest customers were ~70%, 76% and 78% of net revenue in 2023, 2024 and 2025; the largest fell 25% to 19% while the second rose 11% to 17%; TSMC warns customer consolidation may increase concentration further.
    TSMC Form 20-F, FY2025 — customer concentration: ten largest customers accounted for approximately 70%, 76% and 78% of net revenue in 2023, 2024 and 2025; the largest customer accounted for 25%, 22% and 19% and the second largest for 11%, 12% and 17% in those years; ten largest customers accounted for 93% and 84% of accounts receivable at December 31 2024 and 2025; the company notes its customer profile and the nature of its customers' business have changed dramatically with the structural shift to HPC and smartphone applications, that only a limited number of customers are successfully exploiting this business model, and that increasing consolidation of customers may further increase revenue concentration; wafer fabrication accounted for approximately 86% of net revenue in 2025 — FY2025 (ended December 31, 2025) · publ. April 16, 2026 · source ↗
  2. ReportedThe segment note shows Customer A below the 10% threshold in 2023, at 12% in 2024 and 19% in 2025, overtaking Customer B, which fell to 17%. TSMC names neither.
    TSMC Form 20-F, FY2025 — segment note, major customers representing at least 10% of net revenue: Customer A below the threshold in 2023, NT$352,271.2M (12%) in 2024 and NT$726,974.3M (19%) in 2025; Customer B NT$546,550.9M (25%) in 2023, NT$624,345.5M (22%) in 2024 and NT$645,178.7M (17%) in 2025; Customer C NT$241,152.4M (11%) in 2023 and below the threshold thereafter. The filing does not name the customers. — FY2023-FY2025 · publ. April 16, 2026 · source ↗
Sources
Generated September 23, 2026