TSMC Surpasses Apple as AI Revolution Ignites Growth

TSMC and Apple have been partners for years, with Apple designing chips that TSMC manufactures. However, their relationship is changing as Nvidia has overtaken Apple as TSMC's top client due to the accelerating AI infrastructure build-out.

The new A20 Pro chip in Apple's iPhone 18 Pro and Pro Max uses Taiwan Semiconductor's most advanced technology, but it still lags behind competitors in artificial intelligence. This could be a problem for Apple as AI features become more popular and advanced.

TSMC is expected to outgrow Apple next year with revenue growth of 43% in New Taiwan dollars, while Apple's revenue growth is only expected to be about 15%. Additionally, TSMC trades at a lower valuation than Apple, making it the better investment choice.