Asian chip names rally as Nvidia forecasts hotter-than-expected sales after earnings beat
A 300 mm wafer is displayed at the Taiwan Semiconductor Manufacturing Company booth during the 2023 World Semiconductor Conference at Nanjing International Expo Center on July 19, 2023 in Nanjing, China.
VCG | Visual China Group | Getty Images
Asian chip stocks rose in early trading Thursday after American AI chip darling Nvidia It beat Wall Street’s expectations and issued a stronger-than-expected forecast for the fourth quarter.
South Korea’s SK Hynix index rose around 4%. The memory chip maker is Nvidia’s top supplier of high-bandwidth memory used in AI applications.
Samsung ElectronicsMemory suppliers to Nvidia also increased by about 4%. The company is trying to catch up to SK Hynix in high-bandwidth memory so it can sign more contracts with Nvidia.
Taiwan Semiconductor Manufacturing CompanyShares of the company, the world’s largest contract chip maker that produces most of Nvidia’s chip designs, rose 4% in Taipei.
“We expect Nvidia’s results to drive higher earnings estimates across the industry, including major GPU supplier TSMC, memory vendors SK Hynix and Samsung, and the broader Asian subcomponent and assembly value chain,” New Street Research equity research analyst Rolf Bulk told CNBC.
in Tokyo, Renesas Electronicsa major Nvidia supplier, added about 4%. Tokyo ElectronThe company, which provides basic chip-making equipment to the foundries that produce Nvidia’s chips, gained 5.87%. Another Japanese chip equipment manufacturer, Lazertecincreased by approximately 6%.
Japanese technology conglomerate SoftBank It has skyrocketed nearly 7% despite the firm recently selling its stake in Nvidia. Softbank owns majority of British semiconductor company ArmProviding chip architecture and designs to Nvidia.
SoftBank is also involved in a number of AI initiatives using Nvidia’s technology, including the $500 billion Stargate project for data centers in the United States.
Nvidia’s sales and outlook are being closely watched by the tech industry as a sign of the health of the AI boom, and its strong earnings could ease recent fears about an AI bubble.
“There’s been a lot of talk about the AI bubble,” Nvidia CEO Jensen Huang told investors on the earnings call. “We’re seeing something very different from our perspective.”
