Taiwan Semiconductor (TSMC) warns of potential higher chip prices in the future, particularly for Nvidia chips

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https://www.barrons.com/articles/nvidia-stock-price-buy-sell-c70d527a?mod=md_stockoverview_news

Nvidia was gaining early on Thursday, following a positive message about demand for artificial-intelligence chips from Taiwan Semiconductor Manufacturing.

Nvidia shares were up 1% at $848.82 in premarket trading.

The stock closed down 3.9% on Wednesday on a bad day for the semiconductor sector overall after chip-making equipment supplier ASML Holding said first-quarter orders were below expectations.

The latest news about the industry came from Taiwan Semiconductor Manufacturing, the world's largest contract chip maker and a key manufacturer of Nvidia's chips, and it was more reassuring. TSMC said Thursday that its first-quarter revenue was boosted by demand for AI chips.

The Taiwanese company's CEO said AI-related chips should grow to account for more than 10% of TSMC's total revenue this year, increasing to 20% by 2028, according to The Wall Street Journal.

One potential downside for Nvidia is that TSMC strongly hinted on a call with analysts that it would have to raise prices, according to Needham analyst Charles Shi. That could be related to its $65 billion build out of chip-manufacturing plants in Arizona — TSMC founder Morris Chang has warned it might cost at least 50% more to make chips in the U.S. compared with Taiwan. Nvidia has said it expects to eventually source chips from TSMC's U.S. facilities.

Among other chip makers, Advanced Micro Devices was up 0.8% and Intel was up 0.1% in premarket trading.

Nvidia shares have risen 70% so far this year through to Wednesday's close. That compares with a 5.3% rise in the S&P 500 index and a 4.5% rise in the Nasdaq Composite Index over the same period.