AMD operates as a fabless semiconductor company. Its latest Zen 4 and Zen 5 CPUs, as well as RDNA 3 GPUs, are built on TSMC's 5nm (N5) and 4nm (N4) process nodes. In FY 2023 AMD reported $23.6 billion revenue, with the Computing and Graphics segment contributing $15.2 billion. TSMC wafer purchases for that segment were approximately $4.5 billion, representing roughly 30% of segment revenue and over 90% of total unit output. AMD also uses GlobalFoundries' 12nm platform at its Fab 8 in New York for IO die production in EPYC processors, accounting for about 5% of CPU die area. Samsung has secured a small share of AMD's GPU orders on its 8nm node, but TSMC remains the dominant supplier.

AMD's dependence on TSMC creates a clear geopolitical exposure. Any disruption to Taiwan's semiconductor ecosystem—whether from natural disaster, political tension, or capacity allocation—could instantly cut AMD's ability to ship CPUs and GPUs, hurting both revenue and market share. This risk is amplified because AMD cannot quickly shift production to alternative fabs without redesigning chips, a process that takes 12‑18 months. On the upside, the fabless model lets AMD allocate capital to R&D rather than fab construction, enabling faster architectural iterations; its gross margin averaged 48% in 2023, close to Intel's 51% despite lacking fab overhead. However, TSMC's own capacity constraints—evident in its 2024 capex plan of $30 billion—could force AMD to compete for limited slots, potentially raising wafer costs and pressuring margins.

TSMC wins by securing a large, stable customer that contributes billions to its bottom line and justifies continued investment in leading‑edge nodes. GlobalFoundries benefits from the niche IO‑die work at Fab 8, gaining steady revenue without needing to chase cutting‑edge process leadership. Samsung could gain if it expands its GPU share, diversifying AMD's supply base. AMD wins through flexibility and lower capital intensity, but loses if TSMC prioritizes other clients (e.g., Apple, Nvidia) during shortages. Intel loses indirectly as AMD's reliance on TSMC intensifies competition for the same limited capacity, making it harder for Intel to regain process leadership via external foundries. US policymakers lose if the narrative of onshoring fails to materialize, as AMD's strategic dependence remains offshore.

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