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, the stock with the largest weighting in South Korea's main stock index, KOSPI, fell 3.8%.
According to Reuters, the extent of Samsung's supplier relationship with Nvidia is not fully clear, but the company is believed to make HBM chips for some of Nvidia's products.
NVIDIA's other direct suppliers, such as Taiwan Semiconductor Manufacturing Co. (TSMC) and Hon Hai Precision Industry Co. (known internationally as Foxconn), suffered losses of up to 2.8% and 2.96%, respectively.
Stock Chart IconStock Chart Icon
The ripple effect was felt across other tech stocks, but to a lesser extent. Japanese semiconductor stocks such as Renesas, Advantest and Tokyo Electron fell 3.2%, 3.6% and 3.49%, respectively.
Meanwhile, shares of Hong Kong-listed Chinese chipmakers that have little to do with Nvidia's value chain fell: Partially nationalized SMIC 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 drop may have been triggered by concerns the company may not achieve explosive growth this quarter, Luke Ravalli, CEO of Equity Armor Investments, said on CNBC's “Squawk Box Asia.”
Rahbari called the results “really good,” but noted that “for multiple quarters, Nvidia has far exceeded analyst expectations… People might be thinking that this runaway train is slowing down a 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.
Stock Chart IconStock Chart Icon
