Nvidia and Intel "Century join hands" to ignite the chip industry chain! The creators behind the chips embrace the "bullish trend"

In the wake of NVIDIA Corporation's investment of $5 billion in longtime competitor Intel Corporation, along with the news of their collaboration to develop high-performance chips for PC and AI data centers, the stock prices of the two chip giants surged together. By the closing of the US stock market on Thursday, NVIDIA Corporation's stock price rose by 3.5%, pushing its total market value back to around $430 billion, while Intel Corporation's stock price soared by over 22%, reaching as high as 30% at one point during the trading day, as its market value began to challenge $150 billion. The collaboration between the "green factory" and the "blue factory" (referring to NVIDIA Corporation and Intel Corporation respectively), two long-time fierce competitors in the PC sector, is seen as a major positive development for the entire chip industry chain. However, for AMD and ARM, it may be considered a significant negative impact. This is why after the announcement of the collaboration between the two chip giants, not only AMD and ARM, but also various chip stocks in the US market saw a significant increase, covering the entire chip industry chain. Especially notable were the shares of the veteran US chip manufacturer Intel Corporation, as well as the shares of the "creators" behind the chips - including EDA chip design software, semiconductor equipment manufacturers (including packaging equipment), and chip manufacturers - all seeing a collective surge, ultimately driving the Philadelphia Semiconductor Index (SOX), known as the "global chip stock barometer," to rise nearly 4% in a single day. In addition, the recent surge in chip stocks around the world, particularly in the semiconductor/chip stocks closely related to AI training/inference systems, has led to a wave of optimism. Goldman Sachs Group, Inc. and the World Semiconductor Trade Statistics Organization (WSTS), among other authoritative institutions, predict that the semiconductor sector, driven by the unprecedented global AI investment boom, is likely to remain one of the brightest sectors in the US market in terms of long-term performance. The trajectory of the chip stock bull market ignited by AI is far from over, with Oracle Corporation, a global cloud computing giant with contract backlogs that far exceed market expectations, and Broadcom Inc., a global AI ASIC chip "superpower," reporting strong earnings and future prospects last week, further strengthening the narrative of a "long-term bull market" for AI GPU, ASIC, and HBM-based AI computing infrastructure. The demand for AI computing power brought about by AI applications and intelligent agents dominated by inference endpoints is immense, promising exponential growth in the AI computing infrastructure market. The push for AI inference systems is also considered by many to be the major revenue source for NVIDIA Corporation in the future. Looking ahead, from the perspective of research reports from Wall Street financial giant Goldman Sachs Group, Inc. and the World Semiconductor Trade Statistics Organization (WSTS), it is evident that amid the unprecedented global AI investment frenzy, chip stocks may continue to maintain a "structurally bullish" trend. As the "AI computing power demand storm" continues to unfold, the scale of this AI investment wave is expected to reach as high as $2 trillion. NVIDIA Corporation CEO Huang Renxun even predicts that by 2030, AI infrastructure spending could reach between $3 trillion and $4 trillion, presenting significant long-term growth opportunities for NVIDIA Corporation. NVIDIA Corporation and Intel Corporation work together to create a "Green-Blue Chip Golden Age" The collaboration between NVIDIA Corporation and its longtime rival Intel Corporation marks a significant reshaping of the development landscape for PCs and data centers, especially as NVIDIA Corporation plans to further establish itself in the AI PC market by leveraging its strong x86 architecture ecosystem in the PC segment to penetrate the high-demand "end-side AI field" of AI PCs. This move could potentially bring a new source of revenue for NVIDIA Corporation, while Intel Corporation may seize the central position in the core AI race with the help of NVIDIA Corporation. In terms of NVIDIA Corporation's core revenue-generating business the data center (DC) business, NVIDIA Corporation's NVLink bridges the x86 architecture and GPU, introducing a new AI computing integration system of "customized x86 architecture CPU + NVIDIA Corporation AI GPU + CUDA acceleration platform". This "CPU+GPU" collaboration is set to strengthen NVIDIA Corporation's voice in the architecture construction of cloud computing vendors, supercomputers, and enterprise DCs. The two parties will seamlessly connect their architectures, with Intel Corporation creating a customized x86 CPU for NVIDIA Corporation, integrated into the NVIDIA Corporation AI computing infrastructure platform. The core focus is on the high-speed coupling of NVLink bandwidth/interface advantages with x86 architecture CPUs and NVIDIA Corporation Blackwell/Rubin AI GPUs, targeting system-level bottlenecks for large model training/inference and focusing on a more complete "system-level/AI computing cluster platform" solution. Intel Corporation will leverage its x86 architecture (non-foundry) core in the data center and enter the "golden growth zone" of AI infrastructure. Regarding the AI PC sector that NVIDIA Corporation and Intel Corporation have recently focused on - where AMD currently leads, with "x86 CPU+RTX GPU"/NVIDIA Corporation GPU chiplet integration into Intel Corporation's SoC for PCs, this move could potentially reshape the AI PC market share entirely, with both parties likely to dominate the AI PC sector together. Reports and press materials on the collaboration between the two chip giants suggest that Intel Corporation's new generation of PC chips will integrate NVIDIA RTX cores/chiplets, focusing on local-side high-efficiency operation of generative AI, graphics rendering, and blockbuster gaming workloads. For NVIDIA Corporation, this represents a direct integration of its ecosystem into Windows PCs; for Intel Corporation, it means regaining a differentiation point in the AI PC era. According to analyst Ming-Chi Kuo from TF International Securities, the NVIDIA Corporation and Intel Corporation collaboration poses manageable risks for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR as the leader in advanced chip processes. With a strong competitive advantage in advanced chip manufacturing processes, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is expected to maintain its position at the forefront for at least the next five years, with AI chip orders remaining unaffected, and Intel Corporation potentially shifting towards Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR for foundry services due to the advanced process requirements imposed by NVIDIA Corporation, rather than continuing chip production internally. Kuo even predicts that NVIDIA Corporation and Intel Corporation will be key long-term customers for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. Undoubtedly, the collaboration between NVIDIA Corporation and Intel Corporation will drive significant growth in the chip design industry, and the advantages of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR in the advanced chip manufacturing process will continue to benefit the company for years to come. With the global demand for AI chips expected to remain robust until 2027, chip manufacturers such as Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, Samsung, and Intel Corporation will expand their capacity widely, including storage giants like SK Hynix and Micron expanding HBM production capacity, necessitating large-scale purchases of semiconductor manufacturing and advanced packaging equipment, and upgrades to core equipment. Advanced AI chips require higher logic density, more complex circuit designs, and higher power and precision requirements for devices, leading to greater technical demands in areas such as EUV/High-NA lithography, etching, thin-film deposition, multi-layer interconnectivity, and thermal management, thereby requiring customized manufacturing and testing equipment to meet these demands. Therefore, leading players in the semiconductor equipment sector such as ASML Holding NV ADR, Applied Materials, and Lam Research, will have a strong grip on the "lifeline of chip manufacturing". At the Communacopia + Technology conference hosted by Goldman Sachs Group, Inc., Applied Materials President and CEO Gary Dickerson stated that HBM and advanced packaging manufacturing equipment will be key drivers of strong growth in the medium to long term. New chip manufacturing node equipment such as GAA (Gate-All-Around) and BPD (Backside Power Delivery) will drive the company's next round of strong growth. Particularly in the field of advanced packaging manufacturing equipment, Dickerson mentioned that the revenue doubling trajectory for this business line remains on track, with the HBM equipment market share continuing to expand, increasingly related to innovative DRAM etching. Applied Materials, a leader in the production of leading-edge GAA chip processes and advanced packaging equipment, focusing on the most cutting-edge lithography and advanced packaging equipment, is considered one of the top semiconductor investment targets for Goldman Sachs Group, Inc. in the next 12 months. EDA software vendors and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR will also be beneficiaries of the collaboration between the two chip giants. EDA software is a necessary tool for chip design, often dubbed the "mother of chips." As NVIDIA Corporation, Broadcom Inc., AMD, Amazon.com, Inc., Microsoft Corporation, and other cloud computing giants accelerate the development of high-performance AI chips, the demand for EDA software tools that can design more complex architectures, more energy-efficient AI chips, and accelerate chip design using new AI technologies continues to expand. Anirudh Devgan, President and CEO of Cadence Design Systems, a leading EDA giant, recently stated that the global scale of chip design is continuously expanding, with non-traditional computing clients from cloud computing/system-level companies contributing to about 45% of revenue. Devgan emphasized the expanding use of AI-assisted tools in EDA software tools, with customers reporting faster design cycles and higher efficiency. Additionally, the penetration rate of chip design R&D budgets has increased from 7-8% to around 11%, with further room for growth. The share price of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR hit a historic high once again on Thursday, with the US ADR stock price seeing a strong rise. The surge in stock prices was led by NVIDIA Corporation, Broadcom Inc., and other chip stocks, making Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR a deserving leader in the chip industry chain. As the demand for AI GPUs and AI ASICs remains strong, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, with decades of expertise in chip manufacturing technology and leading-edge innovations in chip manufacturing processes, as well as holding the majority of global chip foundry orders for advanced processes of 5nm and below, is seen as an indispensable figure in the industry. Analyst Ming-Chi Kuo commented that the collaboration between NVIDIA Corporation and Intel Corporation presents controllable overall risks for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's superior position in advanced chip processes is expected to last for at least the next five years, and AI chip orders are unlikely to be affected. Intel Corporation may shift its manufacturing services towards Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR for advanced processes, rather than pushing for Intel Corporation's internal chip production. Kuo even predicts that NVIDIA Corporation and Intel Corporation will be key long-term customers for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR.