AI summary
Summary of article:
After Huang Renxun resigned from a senior position at Huida, Taiwan’s AI supply chain is under short-term pressure on stock prices and orders, but more importantly, whether export controls, financial support, and order execution have changed.
Jen-Hsun Huang Beyond the stock price shock, this will have implications for Taiwan’s AI supply chain. Server companies are concerned about the United States tightening export controls. It is reported that they have increased checks on customers and shipping locations and even suspended orders from unidentified small customers. Next up, NvidiaHuida (also known as NVIDIA) adjusting purchasing, investment and financing support will affect Taiwan’s chip manufacturing, packaging and testing and server industries.
Huida announced Thursday that Jen-Hsun Huang has resigned as chairman, CEO and director, and Chief Financial Officer Carisi will act as interim CEO. Huida’s share price closed down 4.3%. Cloud companies like CoreWeave and Nebius fell, as well as some memory, netcom and power appliance stocks. super micro andbroadcom This goes against the trend.
Nikkei reported that a Taiwanese server industry executive revealed that he would go to Southeast Asia to meet with small customers, mainly to confirm whether the AI servers in the data center are indeed active and working normally. Earlier, there was no need for supervisors to personally investigate at their level. Now extra caution will have to be taken to avoid breaking the law.
An executive at another server company revealed that it has asked its business team to stop accepting orders from unfamiliar new customers and small customers. Its products include Huida, AMD and Intel. The executive said supply is already tight, so it’s better to serve larger and reliable customers first.
This suggests that the storm may first affect the order picking and delivery process rather than factory capacity. Even though the US has not yet announced new restrictions, industry players have already tightened their own inspections.
Chris Hampden, senior vice president of Proxima, a supply chain consulting company owned by Bain, reminded that it cannot be assumed that the change of CEO of HUDA will lead to a reduction in the supply of chips. Changes in orders, long-term capacity commitments, sales channels and regulations actually affect supply. Huida said operations, customer commitments and product development programs will continue moving forward.
Clearbridge Investments manager Michael Feldman also believes that the risk is not that Huida suddenly loses its technical direction. The product plan for the next few years is generally clear. The question is whether it can be implemented. Huang Renxun used to be like a conductor coordinating an extremely complex system.
Another test is funding. Huang Renxun not only sells chips, but also supports the expansion of AI laboratories and cloud companies through equity investment, chip credit lines, and financing guarantees. Bernstein analyst Reisgang asked, what will Huida do next with its investment, financing support and residual value guarantee across the entire AI industry?
If the new management becomes more conservative, customer funding and expansion arrangements may be affected, which will impact demand for chips, advanced packaging, servers and peripherals. But this risk should not be taken as a sign that HUIDA has decided to reduce its support for the time being.
Vivek Arya, an analyst at Bank of America, believes AMD, Broadcom and Marvell may find greater opportunities if Huida’s attention is diverted or subjected to tougher scrutiny.
However, shifting AI chip orders to other design companies does not mean abandoning the Asian supply chain. Hampden pointed out that Asia has a solid foundation in advanced manufacturing, from memory to packaging and testing, and can gradually adjust to demand. But wafer manufacturing, advanced packaging and high-bandwidth memory capacity are all dedicated and can’t be diverted to other products overnight.
Export controls may also affect players outside Huida. US lawmakers from both parties have called for tougher restrictions on China’s acquisition of advanced AI chips. Other suppliers may face similar restrictions when acquiring new customers.
