November 25, 2024

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Jensen Huang, chief executive officer of Nvidia, speaks at Siggraph 2024, at the Colorado Convention Center in Denver, July 29. (AP-Yonhap)

Nvidia CEO Jensen Huang raised the possibility of fabricating its cutting-edge graphic processing units at foundries other than Taiwan-based TSMC, making Samsung Electronics a likely alternative.

At Goldman Sachs Communacopia and Technology Conference in San Francisco, California on Wednesday, Huang said he is willing to consider other companies to produce Nvidia's chips "if necessary," acknowledging the brewing geopolitical tension between Taiwan and China.

"We use them (TSMC) because they're great, but if necessary, of course, we can always bring up others," Huang said.

He answered the question on his outlook on the company's supply chain partnerships in Asia, considering TSMC is currently the sole producer of its most advanced and popular chip products, including H100, H200 and the next-generation Blackwell.

TSMC dominates the global foundry market, accounting for more than a 60 percent share. Nvidia is the foundry's second-largest customer and contributed 11 percent of the company's total revenue in 2023.

"We're fabbing at a TSMC because it's the world's best and it's the world's best not by a small margin, it's the world's best by an incredible margin," Huang said.

At the same time, Nvidia can shift from one fab to another if necessary, the CEO noted.

"Maybe the process technology is not as great, maybe we won't be able to get the same level of performance or cost, but we will be able to provide the supply," Huang said, explaining the scenario where the company would change fabrication firms.

"In the event anything were to happen, we should be able to pick up and fab it somewhere else."

Huang did not specify which of the "others" it would be, but market watchers believe Samsung Electronics would be a likely candidate, being the foundry market's No. 2 after TSMC.

Samsung aims to carve out TSMC's share in the market but is struggling to win over big tech clients. Samsung already adopted the cutting-edge Gate-All-Around technology for its advanced second-generation 3-nanometer process node and 2 nm process. TSMC plans to adopt the GAA technology for the next 2 nm process.

According to market tracker TrendForce, TSMC took a 61.7 percent share in the global foundry market in the first quarter of this year. Samsung followed with 11 percent, while China-based SMIC came in third with 5.7 percent.