Samsung Electronics’ fourth-generation high bandwidth memory or HBM3 chips have been cleared by Nvidia for use in its processors for the first time, three people briefed on the matter said.
SeongJoon Cho | Bloomberg | Getty Images
Global chip stocks fell on Thursday, after U.S. chip darling Nvidia reported fiscal second-quarter results that beat analyst expectations — but disappointed traders hoping for higher growth rates.
Over in Asia, South Korean chipmakers SK Hynix and Samsung Electronics — which are both suppliers to Nvidia — logged the biggest losses among Asian chip firms.
SK Hynix, which manufactures high bandwidth memory chips — used in AI applications— for Nvidia, slumped 5.4% during Asia trading hours as of 3:30 a.m. ET.
Samsung Electronics, the highest weighted stock on the South Korea’s benchmark stock index, Kospi, fell over 3%.
While the extent of Samsung’s supplier relationship with Nvidia is not fully known, the company is expected to be manufacturing HBM chips for some Nvidia products, according to Reuters.
Other direct suppliers to Nvidia such as Taiwan Semiconductor Manufacturing Company and Hon Hai Precision Industry — known internationally as Foxconn — saw losses of roughly 2% and 1%, respectively.
In Japan, semiconductor manufacturing firm Tokyo Electron fell 2%.
Conversely, not all chipmakers were in the red Thursday. Chinese state-backed chipmaker SMIC was up nearly 1%, while Hua Hong Semiconductor rose almost 3%.
That came amid a broader jump in Hong Kong’s Hang Seng Index, which was up 0.5% Thursday.
In Europe, Dutch chip firm BE Semiconductor was down around 0.4% in early morning deals, while compatriot firm ASML, a major semiconductor equipment maker, saw its shares climb 1%.
Fellow Dutch chipmakers STMicroelectronics and ASMI rose 2% and 1%, respectively, while German firm Infineon was also up 1%.
Stateside, Nvidia’s rival U.S. chipmaker AMD, which also significantly benefited from the artificial intelligence boom, fell nearly 4% in extended-hours trading.
SoftBank-backed chip designer Arm and chipmaking firm Broadcom and others, including Qualcomm, also moved lower.
Super Micro, meanwhile, sank 7% in after-hours trading, adding to losses of 19% in Wednesday’s trading session. This was off the back of a delay to the firm’s annual report after a report from shortseller Hindenberg Research identified alleged “fresh evidence of accounting manipulation” at the company.
Super Micro, which declined to comment on Hindenburg’s report, said it required more time to assess “the design and operating effectiveness of its internal controls over financial reporting as of June 30, 2024.”
Runaway train slowing down
While the Nvidia beat quarterly revenue and earnings per share estimates, the fall in shares could have been triggered by fears that the company may not be able to deliver explosive growth in the current quarter, according to Luke Rahbari, CEO of Equity Armor Investments told CNBC’s “Squawk Box Asia.”
Rahbari said the results are “really good”, but also noting that “For so many quarters, Nvidia had blown out expectations of analysts … People [are] maybe thinking the runaway train is slowing down a little bit.”
He still remains bullish on the company, highlighting “no company in the world, in my estimation, has the position that Nvidia has in their industry, such a dominant position.”
Nvidia’s gross margin, however, slipped to 75.1% from 78.4% in the prior period, while it annual gross margin forecast of “mid-70% range” was below analysts’ estimate of 76.4%, according to StreetAccount.
Speaking to CNBC’s “Squawk Box Asia,” Mark Lushcini, chief investment strategist at financial advisory firm Janney Montgomery Scott, called the decline in Nvidia shares a “rounding error,” citing how much Nvidia had risen this year. On a year to date basis, shares have risen about 150%.
He noted, “the company is growing fast, but the pace of growth is slowing down for 4 quarters now. For a company that’s trading on a 40-50 times forward earnings, that’s a high demand hurdle to overcome vs expectations.”
