[SINGAPORE] The growing influence of Nvidia in the Asian technology sector is becoming increasingly evident as the company forges new partnerships with local firms. In recent developments, companies such as South Korea’s LG Electronics, Taiwan’s Nanya Technology, and China’s Huizhou Desay SV Automotive and Pateo Connect Technology Shanghai have seen their stocks rise sharply following announcements of collaborations that enhance their ties with the US chip designer. This influx of partnerships underscores how demand driven by Nvidia is reshaping stock performance across Asia’s technology supply chain.
Recent data compiled by Bloomberg reveals that Asian suppliers now account for approximately 90 percent of Nvidia’s production costs, a significant increase from around 65 percent last year. This shift reflects Nvidia’s growing dependence on Asian partners, which lead in manufacturing, assembly, and key component supply. “It’s inevitable that global tech companies like Nvidia will continue to ramp up their reliance on the Asia supply chain,” said Ling Vey-Sern, managing director at Union Bancaire Privee. He noted that the advent of physical AI could further increase the demand for AI chips within these supply chains.
In the past week, LG Electronics’ shares surged as much as 15 percent on April 28, marking their most significant intraday gain since February, following reports that the company and Nvidia were discussing the integration of LG’s home robots with Nvidia’s platform. Similarly, Nanya Technology’s stock rose by 10 percent after news broke of its collaboration with Nvidia. China’s Huizhou Desay also experienced a stock rally following the announcement of a new mass-production intelligent driving solution developed in partnership with Nvidia, while Pateo Connect Technology’s shares soared after entering multiple collaborations with the chip designer.
A spokesperson for LG Electronics confirmed that the company recently met with Nvidia to explore strategic collaboration opportunities in the realm of physical AI, including robotics. Meanwhile, a representative for Samsung Electronics declined to comment, and Nanya stated it does not discuss customer-related information.
Broadening Demand
Nvidia’s expansion into physical AI, encompassing robotics, autonomous systems, and AI-enabled manufacturing, positions Asia as a vital partner in this growth trajectory. CEO Jensen Huang has framed physical AI as the next significant wave following generative AI. “Increasing and broadening demand is creating opportunities across industries for more tech suppliers to join the supply chain as AI buildout continues globally,” commented Marvin Chen, a strategist at Bloomberg Intelligence, adding that strong performance in north Asian markets is likely to continue.
The latest capital expenditure guidance from major US tech companies indicates that spending on AI is accelerating. Amazon.com, Microsoft, and Alphabet are each committing approximately $190 billion to $200 billion this year, with Meta Platforms raising its outlays to as much as $145 billion. Nvidia plays a pivotal role in this shift, accounting for about half of Microsoft’s capital expenditure and roughly a quarter of Amazon’s. It also holds a leading share at Meta and Alphabet, as per Bloomberg’s data.
This surging demand is reflected in the financial results of Nvidia’s suppliers. Samsung’s semiconductor division reported a remarkable 48-fold increase in profit last week, while SK Hynix announced a five-fold increase in quarterly earnings shortly before. “Asia’s technology base is a structurally important advantage, particularly as AI creates new demand across semiconductors, components, servers, and broader hardware infrastructure,” stated Rajeev De Mello, a portfolio manager at Gama Asset Management. He emphasized that Asia’s established supply chains and expertise in developing advanced semiconductors and robots provide a robust foundation for implementing physical AI.
As Nvidia continues to expand its partnerships and the demand for AI-driven technologies grows, the shape of the technology landscape in Asia is poised for transformation, reinforcing the region’s critical role in the global supply chain.
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