The Zhitong Finance App learned that the stock price of Taiwanese chip design manufacturer MediaTek Inc. (MediaTek Inc.) soared sharply, boosted by US chip giant Nvidia (NVDA.US)'s $3.5 billion investment news. According to reports, this investment is Nvidia's largest direct investment outside the mainland of the US so far.
Under an agreement announced Monday, Nvidia will buy bonds that can be converted into MediaTek shares. Stimulated by this favorable trend, MediaTek surged 10% in the Taipei stock market on Tuesday, hitting the single-day limit of gains and losses.
In the past, MediaTek was famous for its fierce competition with Qualcomm (QCOM.US) in the mobile phone chip market, and the two sides have long competed for orders from OPPO and other mobile phone brands. However, in recent years, the company has gradually switched its business focus to customized chip design, competed with companies such as Broadcom (AVGO.US), and gradually won the trust of AI chip partners developed by large technology companies themselves.
Francis Tan, chief strategist at Indosuez Wealth Management in Singapore, said: “This investment is an important endorsement of MediaTek's strategic direction and marks its transformation from a company famous for smartphone chips to a broader AI semiconductor company.”
Earlier this year, MediaTek reached a partnership with Google (GOOGL.US), and some analysts speculated that SpaceX (SPCX.US) might become its next AI customer. This series of benefits has helped MediaTek's market value roughly triple in recent months.
According to reports earlier on Monday, Nvidia's investment is part of MediaTek's total US$3.9 billion convertible bond issuance plan. A MediaTek spokesperson issued a separate statement confirming that Google and other investors also participated in this round of financing, but did not disclose the exact amount of investment.
As part of the deal, MediaTek will allow customers to design their own AI chips using Nvidia's NVLink Fusion technology and connect directly to Nvidia's large-scale computing systems. The technology provides ready-made connectors and dedicated memory to enable custom AI chips to connect to Nvidia data center systems, helping customers save time and engineering costs, and focus on their own chip design without having to build an interconnection with the Nvidia system from scratch.
Furthermore, the two companies will continue to cooperate on personal computer (PC) chips and AI automotive technology. In June of this year, the two sides jointly launched the RTX Spark PC chip to directly introduce AI functions into laptops and desktops.
MediaTek CEO Cai Lixing said that it is expected that after reaching cooperation with Nvidia, the company's AI chip business will further accelerate. MediaTek previously estimated that its customized AI chip business will reach 2 billion US dollars in revenue this year, and plans to occupy about 15% of the 80 billion US dollar market in this field in 2027.
Notably, this investment also comes at a time when Nvidia is increasing its financial layout for the AI ecosystem. Earlier this month, Nvidia provided a guarantee of up to 105 billion US dollars for OpenAI's data center lease in Ohio, drawing attention from the outside world about chipmakers funding customers to stimulate demand for AI products. A few days ago, Nvidia also gave a rare long-term forecast of 70% revenue growth next year. Hwang In-hoon said that AI has reached an “inflection point” and is generating real value.
In response to questions from the outside world about Nvidia driving demand for its AI products by investing in customers or partners, Nvidia CEO Hwang In-hoon responded, “This is not a cycle, because obviously they do their business; we do ours.”
MediaTek is also continuing to promote diversified layout from smartphones to data center AI chips. The company approved a $5 billion financing plan in July to support related business development.