Taiwan chip stocks climb after Nvidia announces $150 billion spending

Nvidia The chip maker is planning AI-powered growth, CEO Jensen Huang announced on Wednesday, announcing a massive expansion in Taiwan with a new campus and a tenfold increase in annual spending.

Taiwan’s Taiex stock index rose 1.7% to a record close on Wednesday. In other news helping earnings: South Korean SK Hynix and US-based Micron became the latest chip-related companies to reach $1 trillion in market value.

“Now we spend $100 [billion]”In Taiwan, it increases to 150 billion dollars every year,” Huang said, noting that in Taipei, this amount increased from 10 billion dollars to 15 billion dollars annually only four or five years ago.

By the end of the year, Nvidia will begin building a new office complex called Constellation in northern Taipei that could house 4,000 employees when it opens in 2030, he said. This is four times the company’s current number of employees in Taiwan.

Shares of Taiwan chip manufacturing giant TSMC It closed Wednesday with a 1.3% increase, MediaTek 8.8% won and Delta Electronics increased by 7.2%. The three stocks, all semiconductor industry giants, are the largest companies by market capitalization on the Taiex index.

Nvidia designs the chips while TSMC manufactures them. Nvidia is expected to overtake Apple as TSMC’s largest customer this year.

A $150 billion annual spend on Taiwan would be among Nvidia’s largest spending plans ever and would exceed the company’s revenue in a single quarter. The company reported Record revenue of $81.6 billion For the quarter ending April 26, revenue of $91 billion is projected for the current quarter.

The company announced plans to invest $500 billion in AI infrastructure in the US with local manufacturers over four years; This amounts to an average of $125 billion annually in value creation in the United States.

The investment comes at a time when Nvidia faces increasing regulatory hurdles. sells to the mainland Chinese market. Revenue from Taiwan rose more than 50% in the latest quarter from a year ago. Mainland China and Hong Kong halved.

Shares of major Chinese chip players, including SMIC, fell on Wednesday; Cambricon fell 5% and Hygon fell 7%.

Shares had risen earlier in the week after Chinese telecom giant Huawei announced Monday morning that it was developing a new approach to manufacturing advanced semiconductors. The company plans to use its new “LogicFolding” engineering in a smartphone chip this fall and in Ascend chips powering data centers “around 2030.”

Earlier this month, widely followed venture capitalist Chamath Palihapitiya also He said Taiwan’s importance may decline Global semiconductor development in 18 months, thanks to advances from US-based Neuralink.

“Taiwan is the epicenter of the artificial intelligence revolution,” Huang said on Wednesday.

Huang added that combining AI with hardware, or “physical AI,” will “transform manufacturing.” “In Taiwan, our partners will benefit from all our technologies that will transform production.”

—CNBC’s Katie Tarasov contributed to this report