Major global semiconductor stocks experienced a surge on Tuesday following Nvidia’s announcement of a substantial $100 billion investment in OpenAI. The artificial intelligence lab intends to construct and deploy Nvidia systems requiring 10 gigawatts of power, equivalent to between four and five million graphics processing units (GPUs), according to Nvidia CEO Jensen Huang. OpenAI is an artificial intelligence research and deployment company. The company’s mission is to ensure that artificial general intelligence benefits all of humanity.
The announcement sparked positive sentiment on Wall Street, which flowed through to the global chip sector, particularly benefiting companies with ties to Nvidia. In Taiwan, shares of Taiwan Semiconductor Manufacturing Co. (TSMC), which manufactures chips for Nvidia, closed 3.5% higher. Similarly, in South Korea, SK Hynix, a memory chip supplier for Nvidia’s systems, saw its shares rise by more than 2.5%. Samsung also closed up 1.4%, with markets hopeful it will soon supply Nvidia with its high-bandwidth memory chips.
The chip stock rally extended to Europe, although the picture was more mixed. STMicro, Infineon, and BE Semiconductor all experienced gains in early trading. However, semiconductor equipment firm ASM International reported that it expected lower-than-anticipated fourth-quarter revenue, causing a sharp decline in its shares. This news also negatively impacted other chip equipment companies, such as ASML, whose machines are essential for manufacturing the most advanced semiconductors.
According to Ben Barringer, global technology analyst at Quilter Cheviot, the market has many suppliers, and investors recognise that it isn’t a zero-sum game. Stephane Houri, head of equity research at ODDO BHF, noted that the strengthening AI ecosystem in Europe would particularly benefit equipment manufacturers like ASML and ASMI, who will benefit from TSMC’s solid demand as the manufacturer of Nvidia’s advanced chips.
