Nvidia stock saw a slight uptick early on Thursday following the company’s confirmation that it doesn’t anticipate any disruption resulting from the earthquake in Taiwan. Despite this assurance, the company’s suppliers are taking steps to bolster their operations in the United States.
During premarket trading on Thursday, Nvidia shares rose by 0.7% to $895.45, recovering from a 0.6% decline the previous day. The chip maker stated via email that it does not foresee any adverse effects on its supplies stemming from the earthquake that struck Taiwan on Wednesday, resulting in at least nine casualties. Notably, Taiwan Semiconductor Manufacturing (TSMC), a key supplier for Nvidia, is headquartered in Taiwan and produces chips for the company.
While the limited impact of the earthquake showcased the resilience of Taiwan’s chip-making sector, there is a growing global trend towards diversifying semiconductor manufacturing. This trend is driven by considerations of national security and various government investment incentives.
A recent example of this shift comes from South Korea’s SK Hynix, which announced plans on Wednesday to invest $3.9 billion in an advanced chip-packaging facility in Indiana. SK Hynix, a supplier of high-bandwidth memory chips crucial for advanced AI accelerators, expects the facility to commence mass production in the second half of 2028.
Nvidia has also expressed its intention to eventually source chips from TSMC facilities currently under construction in Arizona. Although TSMC has faced several delays in the project due to challenges in finding skilled labor, recent reports from local media in Taiwan suggest that mass production at the site could commence as early as the end of this year.
In premarket trading, Advanced Micro Devices (AMD) saw a 0.7% increase, while Intel experienced a 0.5% uptick.
Nvidia shares have surged by 80% year-to-date as of Wednesday’s close. This significant increase outpaces the 9.3% rise in the S&P 500 index and the 8.4% gain in the Nasdaq Composite Index over the same period.