TSMC Weighs Making Advanced Memory Chips at Nvidia's Request, Sending Its Shares Up 6%

The chip in question is 3D DRAM, a design that stacks memory cells vertically within a single chip to raise capacity. Neither company has confirmed the plans. TSMC and Nvidia did not immediately respond to requests for comment from Reuters, and TSMC does not comment on market speculation as a matter of practice, according to 24/7 Wall St.

A move into memory would take TSMC beyond the logic chips that make up its business and into a market dominated by Samsung Electronics, SK Hynix and Micron. For Nvidia, TSMC's biggest customer, it would mean a possible additional memory supplier while an AI-driven shortage pushes up prices and sends chip designers hunting for capacity. Micron expects the shortage to last into 2028, according to The Next Web.

According to the report, TSMC is weighing whether to build new factories or to buy an existing plant and convert it to memory production, and it is not clear when output would start. The second route would resemble Micron's $1.8 billion purchase of a Taiwan fab from Powerchip in March. The effort is being led by Hsu Kuo-chin, a TSMC vice president who oversees advanced packaging and who previously ran Micron's regional operations.

Nvidia's exposure to memory costs is large. Its supply obligations have reached $279.0 billion, most of it for memory used in its Vera Rubin systems, and its chief financial officer has said memory price increases have exceeded the company's expectations, 24/7 Wall St. reported. In October, Nvidia was reported to have asked Samsung, SK Hynix and Micron to build the base layer of its custom high-bandwidth memory on TSMC's 3-nanometre process. High-bandwidth memory stacks whole memory chips on top of one another, whereas 3D DRAM stacks the cells inside one chip.

The report arrived after Taiwan's stock market had closed. In New York, TSMC's American depositary receipts rose as much as 7.7% early in the session before closing 6.26% higher, a day after falling 10.78% to $353.10. The stock still ended the week down 7.61%, and it has lost 20.54% over the past month in the sell-off in AI-linked shares. Nvidia rose 2.78% to $186.64, Micron gained 5.12% and the VanEck Semiconductor ETF added 3.52%. 24/7 Wall St. read Micron's gain as a sign that investors did not see the report as a threat to existing memory makers.

Any new supply would be years away. TSMC holds patents on vertical DRAM, but the difficulty lies in reaching mass production with very few defects. Memory is also a cyclical business that has historically earned thinner margins than leading-edge logic; TSMC reported a 66.4% gross margin last quarter. Its capital budget for 2026 is already $60 billion to $64 billion, and management did not discuss memory on its October 15 earnings call. Micron, by comparison, expects first wafers from its new Idaho fab in mid-calendar 2027.

Investors will get fresh data points soon. TSMC reports its October sales on November 10, and Nvidia is expected to report quarterly earnings on November 17.