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Nvidia: TSMC is our primary partner for 10nm and 16nm chips

Being one of the largest fabless designers of semiconductors in the world, Nvidia Corp. is a very special customer of Taiwan Semiconductor Manufacturing Co. For more than a decade, TSMC has been the primary producer of Nvidia graphics processing units and despite of Nvidia’s recent engagement with Samsung Foundry, TSMC will remain the company’s key manufacturing partner.

“We are constantly evaluating foundry suppliers,” said Jen-Hsun Huang, chief executive officer of Nvidia, during the company’s quarterly conference call with investors and financial analysts. “We largely purchase from TSMC, the vast majority of our wafers we buy from TSMC. We are in 20nm, we are expecting to ramp 16nm. We are deeply engaged with TSMC for many, many nodes to come, including 10nm.”


While TSMC remains the world’s largest contract maker of microelectronics, the company is behind Samsung Electronics with its 16nm manufacturing process that employs fin-shaped field-effect transistors (FinFET). Samsung is already producing chips using its 14nm FinFET (14LPE) fabrication technology in high volume, whereas TSMC plans to start making 16nm FinFET chips in Q3 with meaningful revenue contribution starting in the Q4 2015.

At present it is too late for Nvidia to jump ships from 16nm to 14nm (i.e., from TSMC to Samsung). In a bid to get a 14nm FinFET commercial chip from Samsung Electronics in late Q4 2015, Nvidia would have needed to form a design implementation team of around 100-200 engineers a couple of years ago and start to design its ASIC [application specific integrated circuit] in 2013 at the latest. Nvidia would tape out the chip in late 2014 or early 2015, nine to twelve months before the start of mass production. It is unknown when exactly Nvidia decided to use Samsung as a foundry, hence, the company’s 14nm FinFET roadmap and plans are completely unclear.

Officially, Nvidia claims that it does not necessarily need a bleeding-edge manufacturing process to deliver great products.

“There are just so many ways for us to deliver energy efficiency and performance,” said Mr. Huang. “I would not get too obsessed about the process technology all by itself.”.


Nonetheless, process technologies are crucial for Nvidia. If Intel or AMD release their new products two or more quarters ahead of Nvidia, the company’s revenue and market share will decrease. Therefore, it makes a great sense for Nvidia to have two foundry partners. However, since it takes a long time to design a modern chip, decisions regarding manufacturing and process technologies have to be made years before such IC [integrated circuit] hits the market. At present Nvidia seems to be downplaying its relationship with Samsung, but no one knows what may happen in the future.

“But we are always looking at new foundry suppliers, and competition keeps everybody sharp,” said the CEO of Nvidia. “But for all intents and purposes, TSMC is our primary partner.”

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KitGuru Says: “Looking” at new foundry partners and listing one as a supplier in your filing with the Securities and Exchange Commission are two completely different things. In general, it seems that Nvidia is about to start using Samsung as a foundry partner, but it is completely unclear what exactly Samsung will produce for Nvidia. Perhaps, after learning about TSMC’s 20nm focus in late-2011 – early-2012, the company decided to diversify its wafer suppliers. If this is the case, then Nvidia’s next-gen “Pascal” GPUs as well as Tegra system-on-chips will be made by both Samsung and TSMC. Unfortunately, there are not a lot of facts to prove that theory.

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