A graphics processing unit (GPU) upgrade by Nvidia Corp is expected to drive growth in the global gaming industry this year and benefit local firms with high exposure to the sector, Yuanta Securities Investment Consulting Co (元大投顧) said in a client note on Friday.
The US chipmaker is to launch its new Ampere-based GPU in the second half of this year, leading to a rebound in demand for gaming GPUs and notebook computers after weaker-than-expected sales in the sector last year due to Nvidia digesting inventory, Yuanta said.
A successor to units based on the Turing architecture, Nvidia’s next-generation GPU based on the Ampere architecture is to adopt 7-nanometer technology, which would lead to a 50 percent increase in graphics performance while halving power consumption, the note said.
New Taipei City headquartered Micro-Star International Co (MSI, 微星科技), which makes gaming computers, graphics cards and motherboards, is expected to reap the most benefit, as 60 percent of the company’s sales come from the gaming sector, Yuanta said.
Gigabyte Technology Co Ltd (技嘉) and PC company Asustek Computer Inc (華碩) are also expected to benefit from the GPU upgrade, as about 30 percent of their revenues are rooted in the gaming business, it said.
MSI has the highest market share in the gaming business as it leads the gaming laptop market in terms of shipments ahead of Asustek, Dell Inc, Lenovo Group Ltd (聯想) and Acer Inc (宏碁), Yuanta said, citing data compiled by various research institutes.
The market for gaming laptops is expected to grow at a compound annual growth rate of 22 percent from 2016 to 2023, according to a Market Research Future report.
Asustek’s operations showed significant improvement in the second half of last year as the company’s restructuring efforts, which began in 2018, started to bear fruit, Yuanta said.
Gigabyte reported robust sales last quarter thanks to new Nvidia product launches, as well as strong server shipments.
The company’s server business is forecast to maintain a growth rate of about 20 percent this year, Yuanta said.
Yuanta issued a “buy” rating on MSI, Gigabyte and Asustek shares, with target prices of NT$112, NT$63 and NT$262 respectively.
MSI shares on Tuesday closed at NT$86.7 while Gigabyte shares were NT$49.7, having risen 13.48 percent and 23.63 percent last year respectively.
Asustek shares closed at NT$231.5, an annual gain of 14.89 percent.
PERSISTENT RUMORS: Nvidia’s CEO said the firm is not in talks to sell AI chips to China, but he would welcome a change in US policy barring the activity Nvidia Corp CEO Jensen Huang (黃仁勳) said his company is not in discussions to sell its Blackwell artificial intelligence (AI) chips to Chinese firms, waving off speculation it is trying to engineer a return to the world’s largest semiconductor market. Huang, who arrived in Taiwan yesterday ahead of meetings with longtime partner Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), took the opportunity to clarify recent comments about the US-China AI race. The Nvidia head caused a stir in an interview this week with the Financial Times, in which he was quoted as saying “China will win” the AI race. Huang yesterday said
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
MORE WEIGHT: The national weighting was raised in one index while holding steady in two others, while several companies rose or fell in prominence MSCI Inc, a global index provider, has raised Taiwan’s weighting in one of its major indices and left the country’s weighting unchanged in two other indices after a regular index review. In a statement released on Thursday, MSCI said it has upgraded Taiwan’s weighting in the MSCI All-Country World Index by 0.02 percentage points to 2.25 percent, while maintaining the weighting in the MSCI Emerging Markets Index, the most closely watched by foreign institutional investors, at 20.46 percent. Additionally, the index provider has left Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index unchanged at 23.15 percent. The latest index adjustments are to
CRESTING WAVE: Companies are still buying in, but the shivers in the market could be the first signs that the AI wave has peaked and the collapse is upon the world Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported a new monthly record of NT$367.47 billion (US$11.85 billion) in consolidated sales for last month thanks to global demand for artificial intelligence (AI) applications. Last month’s figure represented 16.9 percent annual growth, the slowest pace since February last year. On a monthly basis, sales rose 11 percent. Cumulative sales in the first 10 months of the year grew 33.8 percent year-on-year to NT$3.13 trillion, a record for the same period in the company’s history. However, the slowing growth in monthly sales last month highlights uncertainty over the sustainability of the AI boom even as
RSS