A SK Hynix Inc. 12-layer HBM3E memory chip displayed at the Semiconductor Exhibition in Seoul, South Korea.
Bloomberg | Bloomberg | Getty Images
Semiconductor stocks staged a robust comeback on Monday, recovering ground lost during Friday’s market sell-off. A confluence of factors, including a major AI chip deal and signals of potentially easing U.S.-China tensions, provided significant tailwinds for the sector.
The rally was partly fueled by OpenAI’s announcement of a partnership with Broadcom to develop custom AI chips. This move signals OpenAI’s intent to diversify its chip supply chain and reduce reliance on single providers. The agreement reflects the increasing demand for specialized silicon tailored to specific AI workloads, a trend that could reshape the semiconductor landscape. This deal follows OpenAI’s earlier agreements with Nvidia and Advanced Micro Devices, solidifying its commitment to securing access to cutting-edge AI hardware.
Broadcom shares responded positively to the news, surging 10% in Monday’s trading session. Analysts suggest this partnership could unlock new revenue streams for Broadcom and solidify its position as a key player in the burgeoning AI chip market. The deal is strategically significant, as it moves Broadcom beyond networking chips and into the heart of AI acceleration hardware.
Adding to the positive sentiment, President Donald Trump attempted to allay market anxieties regarding U.S.-China relations in a Truth Social post, stating that “it ‘will all be fine.'” While the specific context of the comment remains ambiguous, investors interpreted it as a possible indication of a less confrontational stance on trade and technology, which had previously triggered market jitters due to potential retaliatory measures in the semiconductor industry.
The VanEck Semiconductor ETF (SMH), a key benchmark for the sector, jumped 4%, indicating broad-based strength across semiconductor stocks. Nvidia saw a significant rebound, rallying nearly 3%. Taiwan Semiconductor (TSM), a bellwether for the global chip manufacturing industry, and On Semiconductor experienced even more substantial gains, rising approximately 8% and 9%, respectively. Micron Technology, a leading memory chip manufacturer, also benefited from the positive market sentiment, climbing over 6%.
It’s worth noting that Friday’s market downturn was triggered by concerns over potential new tariffs on Chinese goods and restrictions on critical software exports. President Trump had threatened tariffs on China in response to the country’s actions regarding rare earth elements. These threats raised fears of a renewed trade war that could disrupt global supply chains and negatively impact the semiconductor industry. The tech megacaps collectively shed $770 billion in market capitalization on Friday, underscoring the sensitivity of tech stocks to geopolitical tensions. Alphabet and Tesla managed to recover those losses during Monday’s trading session, highlighting the market’s capacity for rapid recovery in response to perceived shifts in the economic and political landscape.
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/10815.html
