"Same CEO Origin Country and Founding Year"... 'NVIDIA Partner' SMCI

WSJ "Unknown Server Manufacturer
Included in S&P 500 Index"
Rapid Growth Alongside Nvidia Amid AI Boom
Many Similarities to Nvidia

"There is a company whose fate is deeply intertwined with NVIDIA amid the artificial intelligence (AI) boom. That company is Super Micro Computer (SMCI)." (Wall Street Journal·WSJ)

SMCI, known as the partner of AI leader NVIDIA and attracting market attention, will be included in the S&P 500 index starting on the 18th (local time). SMCI's stock price has surged 274% this year, surpassing NVIDIA's increase rate (82%) by more than three times.

[Image source=Reuters Yonhap News]

SMCI is a server manufacturer that provides essential infrastructure for AI training and has recently experienced rapid growth. Since the launch of OpenAI's generative AI 'ChatGPT' last year, NVIDIA's high-performance graphics processing units (GPUs), capable of processing numerous mathematical calculations quickly, have become scarce. At the same time, high-performance servers are essential to store and manage the large volumes of AI data produced by GPUs, and SMCI plays this role.

NVIDIA and SMCI are regarded as having a mutually dependent relationship. This was evident during a conversation at the Computex conference held in Taiwan last May, where Charles Liang, SMCI CEO, and Jensen Huang, NVIDIA CEO, appeared as keynote co-speakers. At that time, CEO Liang said that the timing of new AI server releases could depend on NVIDIA chip supply and requested, "Give us more chips." In response, CEO Huang said, "It depends on SMCI (new AI servers)."

Additionally, CEO Liang mentioned in a WSJ interview that the proximity of SMCI's headquarters in San Jose and NVIDIA's headquarters in Santa Clara?just a 15-minute drive apart?has helped their collaboration. He explained, "Thanks to this, the engineering teams could work together from early morning until midnight."

SMCI and NVIDIA also share similarities in their founding years and the CEOs' countries of origin. SMCI was founded in the same year as NVIDIA, 1993. CEO Liang was born in Taiwan and majored in electrical engineering at the University of Texas. Similarly, CEO Huang, also of Taiwanese descent, earned a bachelor's degree in electrical engineering from Oregon State University. CEO Liang is known to have known CEO Huang for decades. WSJ stated, "Just as NVIDIA's history has been led by CEO Jensen Huang alone, the same applies to SMCI."

[Image source=Yonhap News]

SMCI is expanding its manufacturing facilities overseas in Taiwan, Malaysia, and other locations, supported by increasing server orders. The goal is to produce 5,000 server racks (computing infrastructure) per month by the first half of this year.

Revenue is growing rapidly. Fourth-quarter revenue last year was $3.66 billion, a 103% increase compared to the same period the previous year. SMCI is confident that its potential annual revenue could exceed $25 billion.

Opinions vary on whether SMCI can maintain a dominant position in the server sector in the long term. Wedbush analyst Matt Bryson pointed out, "Historically, no company selling servers has held more than a 30% share of the cloud market." The market estimates SMCI's market share at about 20%.

However, the fact that SMCI is keeping prices low to attract new customers is emerging as a positive factor. Based on fourth-quarter results last year, SMCI's gross margin was about 15%, whereas competitor HPE's was as high as 36%. David Weigand, SMCI Chief Financial Officer (CFO), emphasized, "We will seize opportunities by enhancing price competitiveness to secure market share."

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