Ten Customers, Seventy-Eight PercentNarrow moat
TSMC (TSM) — moat facet
Seventy, then seventy-six, then seventy-eight percent from ten buyers — and TSMC warns its customers' own consolidation will push it higher.
TSMC generates revenue from hundreds of customers worldwide, and it barely matters. The ten largest accounted for 70% of net revenue in 2023, 76% in 2024 and 78% in 20251 — a trend, not a level. The company warns that the increasing consolidation of its customers may raise the concentration further.
The credit picture is tighter still, though it improved: the ten largest customers represented 93% of accounts receivable at the end of 2024 and 84% at the end of 20252. TSMC considers the concentration of credit risk on the remaining receivables immaterial, which is another way of saying that ten relationships carry essentially all of the company's counterparty exposure.
The honest defence is the one the moat pages make: these customers cannot get comparable chips anywhere else, so the dependence runs both ways, and TSMC is the party with the pricing power. That is genuinely true at the leading edge and it is why this concentration has never yet cost TSMC anything.
But a rising number deserves attention on its own terms, because concentration determines what a single lost programme costs. Watch the ten-largest figure each year alongside the top-two gap. Both rising together would mean TSMC's revenue is converging on a very small number of AI-driven decisions taken in a very small number of boardrooms.
Seventy to seventy-eight percent in two years, with the company flagging that customer consolidation may take it higher still. Receivable concentration improved from 93% to 84% of the ten largest, which is the one number moving the right way. Nothing here is dangerous while the customers are the best credits in technology and cannot buy elsewhere; it simply raises the cost of any single programme going away.
The credit exposure is more concentrated than the revenue, though it improved in 2025; TSMC considers the remaining receivable concentration immaterial. Ten relationships carry essentially all counterparty exposure. Watch this alongside the 78% revenue figure.
Source: TSMC Form 20-F, FY2025 (credit risk disclosures) ↗- ReportedTen largest customers were 70%, 76% and 78% of net revenue across 2023-2025, and TSMC warns customer consolidation may raise it 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 ↗
- ReportedThe ten largest customers accounted for 93% and 84% of accounts receivable at the end of 2024 and 2025.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 ↗