TSMC reveals that the demand for AI chips is still hot, with NVIDIA rebounding by about 3% today after a sharp decline
TSMC stated that the demand for high-end artificial intelligence chips remains strong, with limited supply, leading to a rise in stock prices. Nvidia plummeted due to geopolitical concerns, but rebounded by about 3% on Thursday. The US chip sector suffered a heavy blow, with AMD, Arm, Broadcom, and Qualcomm seeing significant declines in stock prices. Dutch company ASML announced sales guidance, causing its stock price to fall. Trump's remarks intensified trade concerns, leading to a decline in chip stocks. Citigroup analysts believe that geopolitical tensions are escalating, but TSMC will continue to expand overseas to mitigate risks. Stock prices of other chip manufacturers generally fell, while Intel's stock price rose
According to Zhitong Finance, NVIDIA (NVDA.US) stock price rose by 2.8% on Thursday, following a 7% plunge the day before due to geopolitical concerns. Prior to the increase in NVIDIA's stock price, TSMC (TSM.US) stated on Thursday that the demand for high-end artificial intelligence chips remains high and supply remains limited. TSMC manufactures high-end artificial intelligence chips for NVIDIA.
TSMC Chairman Wei Zhejia stated, "I am also trying to achieve a balance between supply and demand, but I cannot do it. Now, the demand is so high that I have to work very hard to meet the needs of customers. Supply will remain tight until 2025." The company's revenue and net profit announced on Thursday exceeded analysts' expectations.
On Wednesday, the US chip sector experienced its worst day since 2020. Apart from NVIDIA, the stock prices of AMD (AMD.US), Arm (ARM.US), Broadcom (AVGO.US), and Qualcomm (QCOM.US) all fell significantly. Media reports on Wednesday indicated that the Biden administration is considering further restrictions on the export of chip manufacturing equipment to China. ASML (ASML.US) from the Netherlands issued sales guidance for the current quarter on Thursday, causing its stock price to drop by 1%. ASML manufactures lithography machines used by TSMC for chip production.
Meanwhile, Trump's remarks have exacerbated trade concerns. On Wednesday, US presidential candidate Trump suggested that Taiwan should pay "defense costs" to the US as all of America's chip business has been "stolen" without any benefit. This highlights geopolitical concerns, leading to a decline in chip stocks. Citigroup analyst Laura Chen wrote in a report on Thursday, "With the upcoming US presidential election, concerns about geopolitical tensions are increasing, but TSMC mentioned that it will continue its overseas expansion to mitigate risks." TSMC is currently building a large chip factory in Arizona, with some funding coming from US subsidies.
On Thursday, other chip manufacturers are still struggling. Arm fell by 2%, AMD by 2%, and Qualcomm remained flat. NVIDIA's main server assembler Super Micro Computer (SMCI.US) saw a 2% decline in stock price. Intel (INTC.US) rose by over 1%, while Broadcom rose by about 3%. There were reports that the company is negotiating to produce artificial intelligence chips for OpenAI.
In a report on Thursday, UBS analysts stated that investors are taking profits from strong semiconductor companies and reallocating them to other stocks. Comments later this year on how companies will gain investment returns on artificial intelligence chips may once again boost the industry. So far, NVIDIA's stock price has risen by over 150% in 2024. UBS analysts wrote in the report, "Following the strong performance of the semiconductor industry in the first half of the year, some investors are rebalancing their exposure to AI-related semiconductors to large-cap platforms and unprofitable tech companies."