NVIDIA will ultimately owe TSMC close to $7 billion for the privilege of having its upcoming GeForce RTX 40 Series and other next-generation GPUs manufactured on the leading semiconductor foundry’s advanced 5-nanometer process.
This is according to a report shared by MyDrivers this week, which shared that NVIDIA has already prepaid TSMC $1.64 billion in Q3 to prepare for its next round of products that include gaming graphics cards based on the Ada Lovelace architecture. Following another $1.79 billion payment that’s already been lined up, it is estimated that green team will ultimately be paying TSMC as much as $6.9 billion over the long term for its heavily prized production capacity.
“[…] they are no longer a priority customer of TSMC,” MyDrivers reported, offering an explanation as to why NVIDIA has to send over truckloads of cash. “The priority is lagging behind Apple, MediaTek, AMD and other manufacturers. It is not easy to obtain stable 5nm production capacity.”
“According to industry sources, TSMC’s requirements for Apple, MediaTek, AMD and other three major customers are relatively low. They do not need to pay too much deposit in advance to stabilize production capacity. Customers like NVIDIA need to pay huge advance payments in advance if they want to obtain 5nm production orders.”
NVIDIA is seemingly paying the price for placing its bets with Samsung rather than TSMC for its current generation of GeForce products. With competition heating up (e.g., AMD, which is rumored to be unveiling multi-chip-module GPUs soon), the company has plenty of reasons to pay up for the best.