Softbank Group Corp is building up stakes in Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the latest reflection of founder Masayoshi Son’s focus on the tools and hardware underpinning artificial intelligence (AI).
The Japanese technology investor raised its stake in Nvidia to about US$3 billion by the end of March, up from US$1 billion in the prior quarter, regulatory filings showed. It bought about US$330 million worth of TSMC shares and US$170 million in Oracle Corp, they showed.
Softbank’s signature Vision Fund has also monetized almost US$2 billion of public and private assets in the first half of this year, a person familiar with the fund’s activities said.
Photo: EPA
The Vision Fund prioritizes its returns on investment, and there is no particular pressure from Softbank to monetize its assets, said the person, who asked not to be named discussing private information. A representative of Softbank declined to comment.
At the heart of Softbank’s AI ambitions is chip designer Arm Holdings PLC. Son is gradually building a portfolio around the Cambridge, UK-based company with key industry players, seeking to catch up after largely missing a historic rally that has made Nvidia into a US$4 trillion behemoth and boosted its contract chipmaker TSMC near a US$1 trillion value.
“Nvidia is the picks and shovels for the gold rush of AI,” said Ben Narasin, founder and general partner of Tenacity Venture Capital.
Softbank’s purchase of the US company’s stock may buy more influence and access to Nvidia’s most sought-after chips, he said.
“Maybe he gets to skip the line,” he added.
Softbank should have benefited from that bet on Nvidia — at least on paper. Nvidia has gained about 90 percent in market value since hitting a year’s low in early April, while TSMC has climbed more than 40 percent.
Softbank’s market capitalization stands at about US$118 billion, a fraction of Nvidia’s US$4.4 trillion valuation and that of other tech companies most closely associated with AI progress.
The company parted with a 4.9 percent stake in Nvidia in early 2019 that would be worth more than US$200 billion today. The company’s attempts to buy back some Nvidia shares, alongside those of proxy TSMC, would help Son regain access to some of the most lucrative parts of the semiconductor supply chain.
The 67-year-old Softbank founder now seeks to play a more central role in the spread of AI through sweeping partnerships. These include the company’s US$500 billion Stargate data center foray with OpenAI, Oracle and Abu Dhabi-backed investment fund MGX. Son is also courting TSMC and others about taking part in a US$1 trillion AI manufacturing hub in Arizona.
As Arm’s intellectual property is used to power the majority of mobile chips and is increasingly used in server chips, Softbank could carve out a unique position without being a manufacturer itself, said Richard Kaye, co-head of Japan equity strategy at Comgest Asset Management Ltd and a long-time Softbank investor.
“I think he sees himself as the natural provider of AI semiconductor technology,” he said. “What Son really wants to do is capture the upstream and the downstream of everything.”
STRONG INTEREST: Analysts have pointed to optimism in TSMC’s growth prospects in the artificial intelligence era as the cause of the rising number of shareholders The number of people holding shares of chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) hit a new high last week despite a decline in its stock price, the Taiwan Depository and Clearing Corp (TDCC, 台灣集保) said. The number of TSMC shareholders rose to 2.46 million as of Friday, up 75,536 from a week earlier, TDCC data showed. The stock price fell 1.34 percent during the same week to close at NT$1,840 (US$57.55). The decline in TSMC’s share price resulted from volatility in global tech stocks, driven by rising international crude oil prices as the war against Iran continues. Dealers said
PRICE HIKES: The war in the Middle East would not significantly disrupt supply in the short term, but semiconductor companies are facing price surges for materials Taiwan’s semiconductor companies are not facing imminent supply disruptions of essential chemicals or raw materials due to the war in the Middle East, but surges in material costs loom large, industry association SEMI Taiwan said yesterday. The association’s comments came amid growing concerns that supplies of helium and other key raw materials used in semiconductor production could become a choke point after Qatar shut down its liquefied natural gas (LNG) production and helium output earlier this month due to the conflict. Qatar is the second-largest LNG supplier in the world and accounts for about 33 percent of global helium output. Helium is
China is clamping down on fertilizer exports to protect its domestic market, industry sources said, putting an additional strain on global markets that were already grappling with shortages caused by the US-Israeli war on Iran. China is among the largest fertilizer exporters — shipping more than US$13 billion of it last year — and it has a history of controlling exports to keep prices low for farmers. Shipments through the war-blocked Strait of Hormuz account for about one-third of the sea-borne supply. This month, Beijing banned exports of nitrogen-potassium fertilizer blends and certain phosphate varieties, sources said. The ban, which has not
AMAZING ABUNDANCE: Elon Musk has announced plans for a new facility in Texas which would manufacture chips for Tesla and SpaceX to use in robotics and AI Elon Musk said his Terafab project — a grand plan to eventually manufacture his own chips for robotics, artificial intelligence (AI) and space data centers — would be built in Austin and jointly run by Tesla Inc and Space Exploration Technologies Corp (SpaceX). Musk, the chief executive officer of the two companies, said he would start off with an “advanced technology fab” in Austin that would have all of the equipment necessary to make chips of any kind. The project would call for one day supporting 1 terawatt (TW) of computing power per year, the amount Musk expects the companies to
RSS