Asia chip stocks track Nvidia rally on AI capex bets; Chinese chipmakers surge

Asian chipmaking stocks rose on Thursday, tracking an overnight rally in market darling Nvidia as forecasts of high capital spending on artificial intelligence from Wall Street’s biggest firms stood to underpin chip demand.

In China, major chipmaking stocks extended a recent rally as the recent release of DeepSeek R1 spurred increased optimism over China’s AI capabilities, while also presenting a brighter outlook for local chip demand.

TSMC (TW:2330) (NYSE:TSM)- Nvidia’s biggest supplier and the world’s largest contract chipmaker- rose 0.5% in Taiwan trade, following an over 2% rise in its U.S.-listed shares.

Other Nvidia suppliers- including South Korean memory chip giants Samsung Electronics Co Ltd (KS:005930) and SK Hynix Inc (KS:000660)- as well as Japan’s Advantest Corp. (TYO:6857)- rose between 1% and 2%.

Hon Hai Precision Industry Co Ltd (TW:2317), also known as Foxconn (SS:601138), added 0.3%.

NVIDIA Corporation (NASDAQ:NVDA) surged over 5% on Wednesday after technology giant Alphabet (NASDAQ:GOOGL) joined peers Microsoft (NASDAQ:MSFT) and Meta (NASDAQ:META) in forecasting much higher capital spending in 2025, with a bulk of it being linked to AI-related infrastructure.

Their forecasts- although negative for their gross margins- sparked increased bets that Wall Street’s so-called AI “hyperscalers” will continue to invest heavily in AI, underpinning demand for Nvidia’s top-end chips. The chipmaker recently launched its new Blackwell line of AI chips.

The company is widely regarded as a bellwether for AI-related chip demand, given that it makes the most advanced chips in the market.

Gains spilled over into broader chipmaking stocks. Tokyo Electron Ltd. (TYO:8035) added 1.2%, while Renesas Electronics Corp (TYO:6723) soared as much as 14% after clocking strong December quarter earnings.

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But bigger gains in chip stocks were tempered by middling earnings from Qualcomm (NASDAQ:QCOM) and Arm (NASDAQ:ARM). While the two did beat expectations for their December quarter earnings, their guidance for the current quarter and 2025 underwhelmed, causing their shares to fall sharply in aftermarket U.S. trade.

Chinese chipmakers extend rally on DeepSeek cheer
Elsewhere, Chinese chipmakers also advanced, extending a recent rally as investors bet that advancements in Chinese AI programs will fuel local demand for chips.

Semiconductor Manufacturing International Corp (HK:0981), the country’s biggest chipmaker, rose 4% to a record high in Hong Kong trade, while Sunny Optical (OTC:SNPTF) Technology Group Co Ltd (HK:2382) jumped 5.5%.

Chinese chipmaking stocks have been on a tear since late-January, after the release of DeepSeek’s R1 model sparked bets that Chinese AI development remained competitive despite strict U.S. restrictions on chip exports to the country.

These restrictions also spurred bets that demand for local chipmakers will increase.