Shares of major Asian chipmakers and suppliers to Nvidia rallied sharply on Thursday, riding on the coattails of the US chip giant’s surge to a $3 trillion market capitalisation.
Nvidia’s stock jumped on optimism about the booming demand for AI chips, overtaking Apple to become the world’s second-most valuable company after Microsoft.
Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker and a key Nvidia supplier, soared nearly 5% to a record high in Taiwan. China’s biggest chipmaker Semiconductor Manufacturing International Corp (SMIC) climbed 4% in Hong Kong, while Japan’s Tokyo Electron, the country’s most valuable chip firm, advanced 4.3%.
“Nvidia’s valuation milestone underscores the explosive growth potential in AI chips as tech giants race to launch more AI products,” said Rajiv Menon, an analyst at CLSA. “This is having a ripple effect across the semiconductor supply chain, lifting shares of Nvidia’s suppliers and rivals.”
Nvidia’s market value has skyrocketed from $1 trillion to $3 trillion in just over a year, fueled by the rising popularity of generative AI tools like ChatGPT. The company makes the most advanced AI processors currently available, putting it in pole position to benefit from the AI boom.
Sentiment was further boosted by upbeat comments from Dutch semiconductor equipment maker ASML Holding, seen as a bellwether for the chip industry. ASML indicated improving demand from its top customers, mainly TSMC.
Other Nvidia suppliers like Foxconn and Japanese chipmakers Advantest, Renesas Electronics and Disco Corp posted gains of 3-5%. Smaller Chinese players Will Semiconductor and NAURA Technology also ticked higher.
“As AI goes mainstream, we expect a multi-year upcycle in chip demand and technology investments,” Menon said. “While Nvidia is leading the charge, the entire semiconductor ecosystem is poised to benefit from this transformative megatrend.”
However, analysts also cautioned that chip stocks have run up significantly and some consolidation is likely in the near term. Geopolitical risks around US-China tensions and supply chain disruptions also remain potential headwinds for the sector.
Indian IT Also Gains
Indian tech stocks rallied after NVIDIA surpassed Apple to hit a $3 trillion market cap, driven by the AI boom. TCS, Infosys and Tata Communications, which have AI partnerships with NVIDIA, were among the top gainers. TCS and Infosys are each training 50,000 employees on AI technologies with NVIDIA’s support. Tata Communications will leverage NVIDIA’s advanced GH200 Grace Hopper chip to build an AI cloud platform in India.
TCS shares rose 1.1% to ₹3,788, while Infosys gained 1.73% to ₹1,454.95. Tata Communications surged nearly 2% to ₹1,783.45. Smaller firms Rashi Peripherals, the main distributor of NVIDIA’s gaming GPUs in India, climbed 2.4%. Netweb Tech, which will manufacture NVIDIA GPU servers locally, hit a 5% upper circuit.
