What's Going On With Key Nvidia Supplier Taiwan Semi Stock Thursday?

Taiwan Semiconductor Manufacturing Co TSM stock traded higher Thursday in sympathy with Nvidia Corp’s NVDA upbeat quarterly results and guidance, implying that the artificial intelligence frenzy is here to stay. TSMC is a key Nvidia supplier.

On Wednesday, Nvidia reported fourth-quarter revenue of $22.10 billion, up 265% year-over-year, surpassing the Street estimate of $20.62 billion.

The adjusted EPS of $5.16 beat the Street consensus estimate of $4.64.

Nvidia projected a first-quarter revenue of $24.0 billion, plus or minus 2%, above the Street consensus estimate of $22.16 billion.

Also on Thursday, Analog Devices, Inc ADI announced a significant partnership with TSMC to secure long-term wafer capacity. This agreement involves TSMC’s majority-owned subsidiary, Japan Advanced Semiconductor Manufacturing, Inc. (JASM), located in Kumamoto Prefecture, Japan, and focuses on providing ADI with 40nm and finer process technology nodes.

This collaboration will likely enhance ADI’s ability to supply critical technology for various platforms, such as wireless BMS and GMSL applications, by leveraging JASM’s manufacturing capabilities.

The partnership, extending a 30-year relationship between ADI and TSMC, aims to bolster ADI’s hybrid manufacturing network, offering more resilient supply chains, faster response to market shifts, and increased capacity for rapid scaling.

A lot is brewing in the semiconductor space. Microsoft Corp MSFT shared plans to leverage Intel Corp’s INTC 18A process to manufacture its chip design.

TSMC has been the key contract chip maker to Big Tech companies. However, companies also extend to in-house chip making and partnerships with multiple chip designers.