"Turning Crisis into Opportunity": Growing Momentum for US Semiconductor Industry

Ford and GM Push In-House Semiconductor Development
Surging Demand Boosts Nvidia Stock... Expected to Join $1 Trillion Club
Semiconductor Crisis Becomes Turning Point

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] While Korean semiconductor companies such as Samsung Electronics and SK Hynix are facing confusion amid the US-China conflict, American companies continue to surge ahead.

Leading US automakers are drawing up blueprints for in-house semiconductor production. Nvidia, buoyed by strong earnings, is chasing Tesla and sprinting toward a market capitalization of $1 trillion. This suggests that the US's strategy to dominate the semiconductor market is paying off.

According to the Wall Street Journal (WSJ) on the 18th (local time), Ford and GM are pushing forward with in-house semiconductor development and production in collaboration with semiconductor foundries.

On the same day, Ford agreed to a strategic partnership with US foundry company GlobalFoundries to expand the supply of automotive semiconductors. Although specific contract details were not disclosed, the company indicated the possibility of semiconductor production in the US.

Mark Reuss, President of GM, also predicted that GM will strengthen cooperation with semiconductor companies to engage in strategic collaboration for joint development and production of automotive semiconductors. GM plans to reduce the number of semiconductor suppliers used in its vehicles by partnering with specific semiconductor companies.

The moves by Ford and GM come amid global automotive industry production disruptions caused by semiconductor supply shortages.

Automakers have recognized that relying on external semiconductor suppliers could pose challenges in implementing cutting-edge features such as autonomous driving functions and electric vehicle battery systems.

GM President Mark Reuss stated, "As the technology in GM vehicles advances, we expect the semiconductors needed per vehicle to more than double in the coming years."

Mark Hogan, Senior Vice President of GlobalFoundries, evaluated, "The joint venture with Ford is a good example of turning a crisis into an opportunity."

Jose Munoz, Global Chief Operating Officer (COO) of Hyundai Motor Company, also expressed last month in a meeting with foreign reporters, "Hyundai also wants to develop our own chips within the group."

Along with vehicles, amid rising new demand, US semiconductor companies continue to post soaring earnings.

Nvidia, the semiconductor industry’s market cap leader, announced third-quarter revenue of $7.1 billion (approximately 8.39 trillion KRW) and net income of $2.46 billion. As of 2:20 p.m. that day, its stock price was up about 8%. Earlier in the morning session, Nvidia’s stock surged as much as 11%.

Nvidia’s chips are used in autonomous vehicles, cryptocurrency mining, the metaverse, and artificial intelligence, driving rapid demand growth.

On that day, Nvidia’s market capitalization surpassed $800 billion intraday, rapidly expanding the company’s scale. Bloomberg also reported that Nvidia is likely to join the $1 trillion market cap club.

Currently, companies with market capitalizations exceeding $1 trillion include Apple, Microsoft, Alphabet, Amazon, and Tesla. If Nvidia surpasses a $1 trillion market cap, it will be the first semiconductor company to achieve this milestone.

Other semiconductor companies such as Qualcomm and AMD also reported earnings exceeding market expectations. Qualcomm’s stock surged about 8% after announcing a partnership with BMW on the 16th. AMD’s stock soared 31% over the past month amid expectations of benefits from the metaverse.

This content was produced with the assistance of AI translation services.