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Nvidia Corporation is expediting the certification process of Samsung Electronic Co.’s AI memory chips.

What Happened: This information was confirmed by Nvidia’s CEO, Jensen Huang, at an event at the Hong Kong University of Science and Technology on Saturday, reported Bloomberg.

Huang said that Nvidia is evaluating both 8-high and 12-high HBM3E offerings from Samsung.

Notably, the Nvidia CEO did not include Samsung in the list of major partners he mentioned during a post-earnings call with analysts earlier this week.

See Also: Nvidia’s Blackwell Set To Outpace Hopper? Here’s What CEO Jensen Huang Predicts For 2025

At that time, Huang highlighted the impressive list of partners including Taiwan Semiconductor Manufacturing Company Ltd. , Amphenol , SK Hynix , Foxconn, Micron Technology Inc. , and Dell Technologies .

Nvidia reported third-quarter revenue of $35.1 billion, a 94% increase year-over-year, surpassing the Street consensus estimate of $33.12 billion, according to data from Benzinga Pro.

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Why It Matters: This development follows Nvidia’s initial approval of Samsung’s fourth-generation high bandwidth memory in July.

This marked the first time Nvidia approved the use of Samsung's HBM3 chips, albeit for a less advanced Nvidia graphics processing unit (GPU), the H20, specifically designed for the Chinese market.

However, Samsung’s delay in obtaining Nvidia’s certification for AI memory chips has given competitors SK Hynix and Micron an edge in the high-bandwidth memory market.

Nvidia’s new Blackwell AI chips are reportedly facing overheating problems. When asked about it during the earnings call, Huang sidestepped the question and instead highlighted that the supply levels surpassed initial expectations.

Nvidia’s CFO, Colette Kress, also said the company shipped 13,000 GPU samples in the third quarter, including one of the first Blackwell DGX samples to OpenAI.

“Blackwell demand is staggering, and we are racing to scale supply to meet the incredible demand customers are placing on us,” Kress stated during the call.

Price Action: Nvidia shares dropped 3.22% on Friday, closing at $141.95, and saw a further decline of 0.13% in after-hours trading, reaching $141.77 as of the latest update, according to Benzinga Pro data.

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Read Next:

• Jensen Huang Says Building Nvidia Was A ‘Million Times Harder’ Than He Expected

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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

China has launched a new AI Experts Committee to influence artificial intelligence’s global development and governance as part of its broader strategy.

The committee was announced during the four-day World Internet Conference, also known as the Wuzhen Summit, held in Zhejiang province, China.

The AI Experts Committee will be led by Wang Jian, founder of Alibaba Group Holding Alibaba Cloud, who was named chief expert, SCMP reports.

Also Read: Alibaba Reshapes E-Commerce Operations, Names Jiang Fan as Unit CEO

The committee includes approximately 170 specialists, featuring prominent figures such as British computer scientist Wendy Hall, Vienna University of Technology professor Schahram Dustdar and Chinese-American scientist Zhang Ya-qin of Tsinghua University.

Representatives from U.S. firms, including chipmaker Advanced Micro Devices, Inc. , are also members.

The committee aims to enhance international collaboration and promote China’s perspective on responsible AI governance. This initiative mirrors Beijing’s approach to influencing global standards, similar to its efforts in shaping 4G and 5G mobile technologies.

Panel discussions at the Wuzhen Summit focused on AI innovation, governance, and its potential to empower productivity across industries.

At the summit, Eddie Wu Yongming, CEO of Alibaba Group Holding, emphasized AI could transform productivity across various sectors, forming what he described as a “superintelligent body.” Meanwhile, Xiaomi founder Lei Jun shared plans to launch an intelligent-driving application by year-end, aligning with the company’s “All in AI” strategy. Ant Group CEO Eric Jing Xiandong underscored AI’s potential for personalization in services while emphasizing responsible risk management.

The formation of this committee highlights China’s commitment to taking a leading role in global AI governance, even as it faces trade restrictions from the U.S. government. This effort aligns with Beijing’s broader ambitions to remain competitive in advanced technologies.

China has been actively involved in boosting its AI semiconductor base after the U.S. imposed sanctions on advanced AI chip exports to the country, restricting it from advanced technologies from companies like NVIDIA Corp and Taiwan Semiconductor Manufacturing Co .

Also Read:

• Alibaba’s Monetization Strategy Gains Momentum, But GMV Growth Lags: Analyst

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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

United Microelectronics UMC shares have lost 19.9% in the year-to-date period against the Zacks Electronics - Semiconductors industry’s rise of 44.3% and the broader Zacks Computer & Technology sector’s return of 27.4%.

UMC has also underperformed its peers, such as Toshiba and Taiwan Semiconductor TSM, which offer similar semiconductor manufacturing services. Taiwan Semiconductor has returned 83.5% YTD, whereas Toshiba has lost 7.9% over the same time frame.

The underperformance can be attributed to intense competition in the semiconductor foundry service market, rising supply-chain constraints due to geopolitical tensions and higher inflationary costs.

YTD Performance

However, UMC is benefiting from its expanding portfolio and growth in wafer shipments, which increased 7.8% sequentially in the third quarter of 2024. This growth was largely due to strong demand for 22 nanometer (nm) and 28 nm products, which helped offset other market challenges.

These advanced nodes are essential in producing high-performance chips used in various industries, including consumer electronics and automotive, where demand has remained robust.

Expanding Portfolio Aids UMC Prospects

Expanding portfolio has been a key catalyst. Revenues from UMC’s specialty technology portfolio accounted for 53.1% of total sales in the third quarter of 2024. This portfolio includes advanced solutions like its 22-nm display driver technology, which is gaining strong momentum.

Building on this success, in June, UMC launched its 22 nm embedded high voltage technology platform, the most advanced display driver IC solution, enhancing power efficiency and visual experiences for premium displays in mobile devices.

UMC’s diversified manufacturing footprint, highlighted by the near completion of its new fab expansion in Singapore, enables the company to support customers’ long-term strategies while strengthening its position in the semiconductor industry. This expansion is critical to meeting increasing demand and providing advanced solutions.

In addition to technological advancements, UMC is also investing in the future workforce. In October, United Microelectronics signed a Memorandum of Understanding with Ngee Ann Polytechnic to enhance training for engineering talents and expand the workforce for the growing semiconductor industry.

UMC Benefits From a Strong Partner Base

UMC’s expanding partner base, which includes Intel INTC, Infineon IFNNY and Cadence, has been a major growth driver.

UMC’s collaboration with Intel focuses on developing a 12-nm semiconductor process platform. It leverages Intel’s U.S.-based manufacturing capabilities and FinFET transistor design expertise, combined with UMC’s extensive foundry experience in mature nodes.

The partnership with Intel aims to address high-growth markets such as mobile, communications infrastructure, and networking, offering global customers a more resilient and diversified supply chain.

The collaboration with Infineon expands automotive microcontroller production at UMC’s Singapore fab, leveraging Infineon’s eNVM (embedded non-volatile memories) technology. As the automotive market grows, this partnership ensures UMC meets the rising demand for automotive semiconductors.

UMC’s collaboration with Cadence on 3D-IC reference flow accelerates time to market for edge AI and wireless communication applications. This gives UMC a competitive edge, enabling it to stay ahead of the growing demand for advanced semiconductor solutions.

Earnings Estimates Show Upward Movement

For the fourth quarter of 2024, the Zacks Consensus Estimate for UMC revenues is pegged at $1.88 billion, indicating a year-over-year increase of 44.77%.

The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at 17 cents per share, which has increased by a penny in the past 30 days.

United Microelectronics Price and Consensus

United Microelectronics Corporation price-consensus-chart | United Microelectronics Corporation Quote

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

UMC Shares: Buy, Hold or Sell?

UMC shares are currently trading at a significant discount, as suggested by a Value Score of A.

The forward 12-month Price/Sales ratio for UMC stands at 2.33X, significantly below the industry average of 9.22X.

Price/Sales (TTM)

UMC’s strong demand for advanced technology products like 22 and 28 nm solutions and expanding partner base has been noteworthy.

However, the appreciation of the NT (New Taiwan) dollar against the U.S. dollar is expected to lead to a decline in reported NT dollar revenue for the fourth quarter of 2024, which could hurt UMC’s financial results.

United Microelectronics currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Investment Research

Designed to provide broad exposure to the Technology ETFs category of the market, the SPDR NYSE Technology ETF (XNTK) is a smart beta exchange traded fund launched on 09/25/2000.

What Are Smart Beta ETFs?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund Sponsor & Index

XNTK is managed by State Street Global Advisors, and this fund has amassed over $868.77 million, which makes it one of the larger ETFs in the Technology ETFs. This particular fund, before fees and expenses, seeks to match the performance of the NYSE Technology Index.

The NYSE Technology Index is composed of 35 leading U.S.-listed technology-related companies.

Cost & Other Expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the least expensive products in the space.

XNTK's 12-month trailing dividend yield is 0.40%.

Sector Exposure and Top Holdings

ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Information Technology sector - about 64.70% of the portfolio. Consumer Discretionary and Telecom round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 6.49% of total assets, followed by Taiwan Semiconductor Sp Adr (TSM) and Broadcom Inc (AVGO).

Its top 10 holdings account for approximately 38.4% of XNTK's total assets under management.

Performance and Risk

The ETF has added about 25.52% so far this year and was up about 35.42% in the last one year (as of 11/22/2024). In the past 52-week period, it has traded between $152.15 and $207.80.

XNTK has a beta of 1.23 and standard deviation of 28.92% for the trailing three-year period. With about 37 holdings, it has more concentrated exposure than peers.

Alternatives

SPDR NYSE Technology ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.

Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $73.05 billion in assets, Vanguard Information Technology ETF has $82.21 billion. XLK has an expense ratio of 0.09% and VGT charges 0.10%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

Zacks Investment Research

Taiwan Semiconductor Manufacturing Co is set to expand its domestic production capacity with new factories planned in Kaohsiung, Tainan, and Taichung. National Development Council Minister Paul Liu announced on Thursday, following concerns about Taiwan Semiconductor’s overseas expansion projects in countries like Japan, the United States, and Germany.

During a legislative session, Liu emphasized that Taiwan Semiconductor plans to build a new factory in Taiwan yearly over the next decade, Taiwan News reports.

Also Read: Qualcomm’s Shift From Handsets To AI And Automotive Wins Analysts’ Confidence

The Taiwanese government has pledged to ensure adequate water and electricity supplies to support these facilities, which are critical for semiconductor production.

Economics Minister Kuo Jyh-huei reinforced the commitment to domestic growth, stating that Taiwan Semiconductor’s expansion aligns with Taiwan’s strategic semiconductor objectives.

However, discussions around the company’s new plant in Arizona added a layer of complexity as conflicting statements emerged regarding an upcoming celebration for its completion.

While Kuo suggested such an event was imminent, Taiwan Semiconductor founder Morris Chang denied knowledge of it, sparking debate among legislators.

Liu, a Taiwan Semiconductor board member, clarified that he was unaware of any planned celebrations but confirmed he had been invited to a board meeting in the United States in February.

In November, the Biden administration sanctioned Taiwan Semiconductor, restricting its sale of advanced AI chips to China. Meanwhile, during his campaign, former President Donald Trump outlined plans to impose tariffs on Chinese exports, continuing his criticism of the country.

Under the CHIPS Act, Taiwan Semiconductor secured $6.6 billion in U.S. subsidies and proposed up to $5 billion in loans to support A16 chip production in Arizona.

Taiwan Semiconductor’s recent activities highlight its balancing act between domestic and international investments, ensuring global competitiveness while maintaining a strong presence in Taiwan.

The company is accelerating its expansion, aiming to establish over ten semiconductor facilities worldwide by 2025, boosting advanced production capacity.

Significant projects include 2nm fabs in Taiwan and a second plant in Japan’s Kumamoto region, which will break ground in 2025. In addition, Taiwan Semiconductor is advancing facilities in Arizona and Dresden and innovating in advanced packaging technologies such as CoWoS and SoIC.

The company anticipates record capital expenditures of $34 billion—$38 billion in 2025 to meet escalating demand for cutting-edge semiconductor manufacturing.

Price Action: At the last check on Thursday, TSM stock was lower by 1.77% at $185.02 premarket.

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• The Trade Desk Launches Ventura to Transform Streaming TV Advertising

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