Nvidia Stock Gains. Its AI Success Is Sparking a Chips War Among Suppliers. -- Barrons.com

By Adam Clark

Nvidia stock was rising early Tuesday as it continues to test the $2 trillion valuation mark.

The chip maker's success is leading to fierce competition to supply it with advanced memory semiconductors between U.S. company Micron Technology and its South Korean rivals SK Hynix and Samsung Electronics.

Nvidia shares were up 0.2% at $792.55 in premarket trading.

The popularity of its graphics-processing units for training AI systems is continuing to power the stock. Nvidia closed up 0.4% at $790.92 on Monday, leaving it valued at around $1.97 trillion overall.

The demand for Nvidia's GPUs is also reshaping adjacent industries. Micron shares were up 2.6% in premarket trading, adding to a 4% gain the previous day when it said it had begun volume production of its High Bandwidth Memory 3E chips, which will be incorporated in the coming Nvidia H200 GPUs.

Meanwhile, SK Hynix dropped 4.9% in local trading in South Korea. Until recently the company was sole supplier of high-bandwidth memory for Nvidia's AI accelerators, but it has now been joined my Micron and Samsung Electronics.

Samsung said Tuesday that it had developed the highest capacity high-bandwidth memory chip to date, the HBM3E 12H, and that mass production is expected in the first half of this year. It didn't name any customers for the chip.

"When used in AI applications, it is estimated that, in comparison to adopting HBM3 8H, the average speed for AI training can be increased by 34%," Samsung said in its statement.

Samsung shares rose 0.1% in Korean trading on Tuesday.

Other U.S. chip makers were muted on Tuesday. Advanced Micro Devices was up 0.5% in premarket trading and Intel was up 0.6%.

Nvidia shares have risen 60% so far this year through Monday's close. That compares with a 6.3% rise in the S&P 500 index and a 6.4% gain for the Nasdaq Composite Index.

Write to Adam Clark at adam.clark@barrons.com

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February 27, 2024 08:08 ET (13:08 GMT)

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