TSMC Revenue vs Fabless inventory

- Non-Nvidia fabless inventory stands at $0.99 for every $1 of TSMC quarterly revenue, down one-third from the 2Q23 glut peak of $1.49. Nvidia’s $31.6B of inventory alone drives the ratio to the $1.78 peak.

- The ex-Nvidia ratio has only just reached the level of the 2021 shortage. It bottomed at $0.81 in 3Q25 and during 2021-22 it held at $1-$1.2 for six quarters before the correction began.

- TSMC growth keeps making room. TSMC revenue is up 34% y/y, so non-Nvidia inventory can keep growing about that fast without the ratio rising. The ratio only goes up when inventory growth beats TSMC growth, as it did at 56% vs 34% in 2Q26.

- The ex-Nvidia inventory build is early in its cycle. Its inventory growth went from 15% to 56% y/y in three quarters, a similar path to 2021. That cycle ran another four to five quarters, and grew about 45% more in dollars, before it peaked. The current cycle has room.

Source: Sravan Kundojjala