Taiwan Semiconductor Manufacturing (NYSE: TSM) Stocks are declining in trading on Monday, with potential big news on competitive dynamics in the semiconductor industry. The company's shares fell 1.4% as of 3:30 p.m. ET, down as much as 2.8% earlier in the meeting.
TSMC's valuation fell today after news that Chinese tech giant Huawei is testing artificial intelligence (AI) chips that could compete with Nvidiatop semiconductors. NVIDIA relies on TSMC to make its semiconductor designs, and both companies occupy a key position in the wider AI hardware and technology competition between the United States and China.
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The United States has officially restricted NVIDIA's high-end processors and premium chips made by TSMC from being sold to the Chinese market, but Huawei may be expected to take a step towards China in the AI race with its new Ascend 910D processor.
Wall Street Journal Recently, it was reported that Huawei is working with technology industry partners to test new chips. Huawei is reportedly expected to see performance increase of 910d exceed NVIDIA's H100 processor. Meanwhile, Reuters reported that Huawei could prepare to start shipping its rising 910C AI processors to customers in May.
Huawei's new chip design is manufactured by China's largest chip foundry International Semiconductor Manufacturer (SMIC). If SMIC can provide strong production yields from Huawei's chip design, the design matches or exceeds NVIDIA's powerful AI processors, it will mark a major change in the AI market.
Although the H100 chip is not NVIDIA's strongest AI hardware, it is still a very powerful chip suitable for a wide range of applications. TSMC still maintains an important lead when it comes to advanced chip casting services, but investors will closely watch whether SMIC is catching up.
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Keith Noonan has no position in any of the stocks mentioned. Motley fool has a place and recommends NVIDIA and Taiwanese semiconductor manufacturing. Motley Fool has a disclosure policy.
Why Taiwan's semiconductor manufacturing industry sinks today was originally published by Motley Fool