Over the past week, among the ups and downs in the AI chip industry, companies such as Nvidia, Advanced Micro Devices, Broadcom, Marvell Technology, and Super Micro Computer have all been center stage. The intense volatility can be attributed to a variety of factors including fluctuating U.S. international commerce policies, the quarterly financial reports from essential semiconductor providers, and market assessment of Washington’s tariff strategies as well as the ongoing hype around AI.
In the current scenario, notable performers in terms of market gains were Nvidia, Broadcom, AMD, and Supermicro, with each observing a growth in stock prices between 2-11%. This was in contrast to the PHLX Semiconductor Index that saw gains of less than 1%. On the other hand, Marvell depicted a downward trend, with its stocks dipping by 2% over the week.
Two major factors provided the impetus for this week’s market surge. First, the Trump administration’s prospective announcement about an AI and energy investment plan worth $70 billion. Second, the decision by the U.S. government to alleviate specific restrictions on chip exports to China.
The ambitious initiative proposed by President Trump, set to be unveiled near Pittsburgh, revolves around AI data centers, energy production enhancements, upgrading of power grids, and workforce education. The objective of this approach is to fortify the position of the United States as a leader in AI, by not only luring private investment but also minimizing regulations and expediting project permits.
Indeed, this plan encompasses a generous investment of $25 billion by Blackstone President Jon Gray for the expansion of data centers and energy infrastructure. This event will be attended by high-profile executives from major corporations such as BlackRock and Palantir.
Moreover, there’s promising news on the Nvidia front. Recently, the U.S. government granted permission to Nvidia to recommence the sales of its H20 AI chip to China. This is a significant development as Nvidia had to bear a staggering $4.5 billion charge in the first quarter of the year following an export ban on its H20 range to China, implemented on April 9.
In other industry news, Taiwan Semiconductor Manufacturing (TSM), a major supplier for Nvidia and a renowned semiconductor contract manufacturer, reported quarterly results that far surpassed expectations. The driving factor behind these remarkable results is the robust global demand for cutting-edge chips, deemed essential for AI applications.
Taiwan Semiconductor posted net sales of a substantial $30.07 billion, reflecting an increase of 38.6% compared to the previous year. It also reported a net income of $398.27 billion New Taiwanese dollars, a 60.7% rise from the last year. In addition, the organization also revised up its third-quarter forecasts, with projected revenues falling in the range of $31.8 billion to $33.0 billion, exceeding consensus estimates.
On the margins front, Taiwan Semiconductor recorded impressive growth, with gross margins swelling by 540 basis points, reaching 58.6%, and operational margins showing an upswing by 710 basis points, rising to 49.6%. Accelerated demand for avant-garde processor technologies such as 3-nm, 5-nm, and 7-nm chips, continues to be the primary growth driver for the company.
However, it’s not all smooth sailing in the chip manufacturing sector. For instance, ASML Holding, a dominant player in chip equipment production, had its stock price dive by more than 8%. This fall occurred post their warning about uncertain growth projections for 2026, in lieu of looming macroeconomic and geopolitical challenges.
Despite these uncertainties, ASML reported strong bookings worth $6.4 billion, surpassing expected consensus estimates of $5.6 billion. The company also declared second-quarter sales amounting to $8.9 billion, edging past estimates of $8.7 billion, with a profit of $2.66 billion, beating the anticipated figure of $2.37 billion.
In addition to these developments, Broadcom made headlines with the launch of its innovative Tomahawk Ultra chip. Engineered to speed up AI data processing, this chip can connect hundreds of other chips within data centers. This puts it in direct competition with Nvidia’s NVLink Switch.
The distinguishing factor for Broadcom’s Tomahawk Ultra chip is that it has the ability to link four times the number of chips compared to its competitor, employing a faster version of Ethernet as opposed to a proprietary protocol. While both chips are designed to enhance scale-up computing, Broadcom has specifically tailored the Tomahawk Ultra chip for AI applications, positioning it as a potent contender to Nvidia’s powerful GPUs.
Furthermore, Super Micro Computer made an announcement on Wednesday regarding their latest release. They’ve begun the shipment of new 4-socket servers crafted to support heavy-duty database and enterprise applications.
The new servers that are powered by Intel’s latest Xeon processors promise optimized performance for demanding workloads, such as in-memory databases and scientific simulations. This marks a considerable improvement in performance compared to the company’s previous models.