The Largest Customer ChangedNarrow moat
TSMC (TSM) — moat facet
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 era, disclosed without comment.
Buried in TSMC's segment note is one of the more consequential facts in the semiconductor industry, disclosed without comment. Customer A was below the 10% reporting threshold in 2023, appeared at NT$352.3 billion and 12% of revenue in 2024, and reached NT$727.0 billion and 19% in 2025. Customer B, at 25% in 2023, fell to 22% and then 17%1. In 2025 the second overtook the first.
TSMC names neither, and this collection will not pretend to more certainty than the filing supports. But the shapes are informative. One customer has been TSMC's largest for roughly a decade on the strength of a single annual product cycle in smartphones; the other did not reach 10% of revenue until 2024 and then nearly doubled, in exactly the period when AI accelerators began consuming leading-edge capacity. The risk-factor discussion of a structural shift toward high-performance computing points the same way2.
Why it matters more than a change of ranking: the two customers have completely different demand characteristics. A smartphone customer orders to a predictable annual cadence against a mature end market. An AI accelerator customer orders against a capital-spending cycle set by a handful of hyperscalers, which is faster-growing, higher-margin and considerably less predictable.
Watch the gap between the top two in next year's filing. Widening would mean TSMC's revenue is increasingly geared to the AI cycle specifically, rather than to computing generally — a better business in an upswing and a worse one at a turn.
A decade-long relationship was overtaken in two years. That is not a problem in itself — the new leader is buying more than the old one ever did — but it re-geared TSMC's revenue toward a customer whose demand derives from AI capital budgets rather than from annual consumer hardware cycles. Higher growth, higher margin, and materially less predictable.
Customer A was below the 10% threshold in 2023, reached 12% in 2024 and 19% in 2025; Customer B fell 25% to 22% to 17%. TSMC names neither. The two have very different demand characteristics — one an annual consumer cycle, the other a hyperscaler capital budget. Watch whether the gap widens.
Source: TSMC Form 20-F, FY2025 (major customers segment note) ↗- ReportedCustomer A: below threshold in 2023, NT$352,271.2M (12%) in 2024, NT$726,974.3M (19%) in 2025; Customer B: 25%, 22% then 17%.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 ↗
- ReportedTSMC attributes rising concentration in part to the structural shift to high-performance computing.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 ↗