Samsung Electronics’ fourth-generation high-bandwidth memory, HBM3 chips, have been approved for the first time by Nvidia for use in its processors, according to three people briefed on the matter.
Cho Seong-jun | Bloomberg | Getty Images
Asian technology and semiconductor-related stocks fell on Thursday after U.S. chip giant Nvidia Inc. reported second-quarter results the night before, amid a broad decline in major markets in the region.
The losses were most pronounced among companies with direct ties to U.S. tech giants, such as South Korean chipmaker SK Hynix and Samsung Electronics.
Shares of SK Hynix, which makes high-bandwidth memory chips for Nvidia used in AI applications, fell as much as 6.74%.
Samsung Electronics is the most heavily weighted Korean benchmark stock. Stock price index, KOSPI, It fell by 3.8%.
The extent of Samsung’s supplier relationship with Nvidia is not fully known, but the company said It will manufacture HBM chips for some Nvidia productsAccording to Reuters.
Other direct suppliers to Nvidia include: Taiwan Semiconductor Manufacturing Company and Hon Hai Precision Industry Fujitsu, known internationally as Foxconn, lost the most, up 2.8% and 2.96%, respectively.
The ripple effect was felt in other tech stocks, but to a lesser extent. Japanese semiconductor stocks, Renesas, Advantest and Tokyo Electron They fell 3.2%, 3.6% and 3.49%, respectively.
Meanwhile, shares of Hong Kong-listed Chinese chipmakers fell despite having little connection to Nvidia’s value chain. SMIC, Partially nationalized semiconductors fell about 1.4%, while Hua Hong Semiconductor fell 1.66%.
Runaway train slows down
Nvidia beat expectations for quarterly revenue and earnings per share, but the stock price decline may have been driven by concerns that the company may not achieve explosive growth this quarter, Luke Ravalli, CEO of Equity Armor Investments, said in an interview with CNBC. “Squawk Box Asia”
Ravalli called the results “really good,” but noted that “NVIDIA has beaten analyst expectations for multiple quarters.” [are] Maybe they think the runaway train is starting to slow down a little bit.”
He remains bullish on the company, emphasizing that “in my view, no other company in the world has a more dominant industry position than NVIDIA.”
However, Street accounts said Nvidia’s gross margin fell to 75.1% from 78.4% in the previous quarter, and its full-year gross margin forecast of “in the mid-70s” was below analysts’ expectations of 76.4%.
Speaking on CNBC’s “SquareBox Asia,” Mark Ruschini, chief investment strategist at financial advisory firm Janney Montgomery Scott & Co., said the decline in Nvidia’s shares was a “rounding error,” noting how much the company has risen this year: The stock is up about 150% year to date.
“The company is growing fast, but the pace of growth has been slowing over the past four quarters. For a company trading at 40 to 50 times forward earnings, this is a higher-than-expected demand hurdle,” he said.