Chipmaker stocks in Asia have been on a roll thanks to AI. Nvidia achieved a first, becoming the first company to reach a $4 trillion valuation. And thanks to AI, too.
The star of this performance was undoubtedly SK Hynix, the leading supplier of High-Bandwidth Memory (HBM) chips, which are crucial for Nvidia’s latest-generation AI processors. The company’s shares rose an impressive 3.8%, taking it one step closer to an all-time high and strengthening its market position.
This rise was all the more significant in the light of the second-quarter earnings forecasts announced earlier this week by its arch-rival and memory giant, Samsung Electronics Co Ltd, which fell short of expectations. While Samsung’s shares also rose 0.8%, they failed to dent the market perception that SK Hynix has seized momentum and leadership in the AI-specific memory market.
Analysts emphasize that SK Hynix’s early and accurate steps in the HBM market have made it one of the companies most likely to benefit from the AI boom.
SK Hynix isn’t the only company benefiting from Nvidia’s success. Other key players in the ecosystem also benefited from this positive sentiment:
- TSMC: The Taiwanese foundry giant, which manufactures nearly all of Nvidia’s cutting-edge chips, saw a 0.5% increase. TSMC is the cornerstone that transforms Nvidia’s designs into physical marvels, and this partnership underpins the growth of both companies.
- Hon Hai Precision Industry (Foxconn): Foxconn, which plays a key role in assembling the servers and hardware components that house Nvidia chips, also pleased its investors with a 0.3% increase.
- Advantest Corp.: Advantest, a Japanese company that manufactures the testing equipment needed to ensure the flawless operation of these complex chips, also rose 0.4%. This is another example of how the AI revolution is galvanizing not only chipmakers but also all supporting industries.
From a broader perspective, even Semiconductor Manufacturing International Corp., China’s largest chipmaker, saw a 0.6% increase.
Nvidia breaks new ground with a $4 trillion valuation
The key driver driving the markets is that spending on AI infrastructure shows no signs of slowing. Nvidia’s push to the $4 trillion mark on Wednesday confirmed this trend. Major US tech companies and cloud service providers, far from slashing capital expenditures over the past three months, have continued to spend billions of dollars to expand their AI capabilities.
This strengthens expectations that Nvidia, which produces the most advanced and in-demand AI chips on the market, will see its sales continue to grow. The upcoming second-quarter earnings season is expected to further fuel this optimism. Investors will be closely monitoring the earnings and forecasts for the coming quarters, not just from Nvidia but also from suppliers like SK Hynix and TSMC. These figures will provide the clearest signals about the health and growth potential of the AI market.
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