The surge of major Asian chipmaking stocks and Nvidia suppliers on Thursday was closely linked to the overnight rally in Nvidia Corporation. The company reached a valuation of over $3 trillion, surpassing Apple Inc to become the second-most valuable company on Wall Street. This success was attributed to renewed optimism over artificial intelligence and demand for AI chips. Nvidia’s latest line of AI chips further fueled market sentiment towards chipmakers, leading to increased demand for semiconductors.
ASML Holding NV, considered a bellwether for the chip industry, played a key role in boosting sentiment towards chipmakers. The company reported improving demand from its biggest customers, notably TSMC. This news resulted in a nearly 5% surge for TSMC, the world’s largest contract chipmaker, and a key supplier to Nvidia. Other Nvidia suppliers, such as Hon Hai Precision Industry Co Ltd, also experienced modest gains, reflecting the overall optimism in the industry.
The optimism surrounding increased demand for semiconductors extended beyond Nvidia suppliers to broader Asian chipmakers. Semiconductor Manufacturing International Corp, the largest chipmaker in China, saw a nearly 4% surge in Hong Kong trade. Smaller peers like Will Semiconductor Co Ltd Shanghai and NAURA Technology Group Co Ltd also saw slight increases in share prices. Japanese chipmakers, including Advantest Corp. and Tokyo Electron Ltd., experienced notable gains, highlighting the positive outlook for the semiconductor industry as a whole.
The surge in Nvidia’s valuation since 2023 can be attributed to the growing popularity of generative AI tools, such as OpenAI’s ChatGPT. This trend led to an increased interest in the sector, benefiting Nvidia as a provider of advanced AI chips. The broader chipmaking sector also benefited from the growing demand for AI technology, as investors bet on improved chip demand and technology investment driven by the rise of AI.
The recent rally in major Asian chipmaking stocks and Nvidia suppliers reflects a wave of optimism fueled by the demand for artificial intelligence technology. The success of Nvidia and positive reports from industry bellwethers like ASML Holding NV and TSMC have contributed to a positive market sentiment towards chipmakers. As the popularity of AI continues to grow, the chipmaking sector is poised for further growth and innovation.