TSMC Venture Fund Bets $500M on Finding the Next Nvidia
TSMC will put up to $500 million into chip startups and, for the first time, its own suppliers. It could shape who gets scarce advanced chip capacity next.
Hakkı ALKANPublished 4 min read
TSMC, the world's largest contract chipmaker, is setting up a new investment company with up to $500 million to back chip startups that could grow into the next Nvidia or Broadcom. For the first time, the TSMC venture fund may also buy into the company's own suppliers, a shift a senior executive described to Nikkei Asia on November 13.
TSMC's board approved the vehicle on November 10, according to the company's board resolutions, alongside up to $500 million each for stakes in Anthropic and OpenAI. In plain terms, the firm that manufactures chips for Apple, Nvidia and AMD now wants to own a slice of the companies that might become its biggest customers a decade from now.
What did TSMC say about the next Nvidia?
Kevin Zhang, TSMC's senior vice president and deputy co-chief operating officer, laid out the plan in an interview with Nikkei Asia in Tokyo. "We not only support today's Nvidia, but we also want to support the future's Nvidia," he said.
Zhang pointed out that TSMC's best known customers did not start out as giants. "When you talk about TSMC, you immediately think, you have Apple, you have Nvidia, you have AMD, you have Broadcom. Yes, those are great customers," he said, according to Taiwan News. "But remember, when Nvidia started working with us, Nvidia was a startup."
He added that TSMC wants to "formalize" its investing and extend it beyond its immediate customers. The goal, in his words, is a "reinforcing loop" that helps the wider chip industry grow.
Who could get money from the TSMC venture fund?
The fund targets two groups. The first is chip design startups, the kind of young companies that rely on a foundry (a factory that builds chips designed by other firms) because they cannot afford their own plants.
The second group is new for TSMC: suppliers and partners such as intellectual property providers, which license ready-made building blocks that chip designers drop into their products. Reports on the interview also list makers of chipmaking equipment, advanced materials and chemicals as possible targets. TSMC's board resolution names no companies and sets no timeline.
How big is $500 million for TSMC?
Not very, by TSMC standards, and that is part of the story. The new vehicle is about NT$16.45 billion, roughly 2.5 times the emerging fund of about NT$6.57 billion (around $200 million) that TSMC set up in 2021 to give startups access to its advanced manufacturing. Zhang called the returns from that earlier fund "exceptional."
By our count, the new investment company plus the Anthropic and OpenAI stakes add up to as much as $1.5 billion. That is less than 4% of the roughly $40.93 billion in capital spending TSMC's board approved at the same November 10 meeting for new capacity, fab construction and 2027 research. TSMC also reported third quarter net income of NT$763.06 billion.
Why does the timing matter?
The AI stakes come due first. Anthropic plans to price its IPO on November 18 and start trading on Nasdaq under the ticker ANT on November 19, with shares marketed at $70 to $78, as we covered in our report on the Anthropic IPO price range. TSMC's stake is part of a $26 billion private placement at the IPO price that also includes Alphabet, Nvidia and Microsoft.
Zhang's "future's Nvidia" line also lands in an unusual week for the real one. Nvidia is now run without co-founder Jensen Huang, and some investors and employees are still pushing for his return, as our story on the Jensen Huang petition explains.
What does it mean for the chip industry?
For startups, money from the company that builds their chips can matter as much as the cash itself. Capacity on TSMC's most advanced production lines is scarce, and the 2021 fund was built around exactly that kind of access.
For rival foundries such as Samsung Foundry and Intel Foundry, the fund is one more way TSMC can tie tomorrow's chip designers to its factories early. It also fits a broader push by TSMC to widen its role in AI hardware, from advanced packaging to memory, as seen in its 3D DRAM production plans.