.webp)
Summary
- Nvidia (NVDA:US) has seen a significant rise in data center revenue, now constituting 87% of total revenue in Q1 FY25.
- Korea's memory semiconductor exports to Taiwan increased from less than 6% in December 2021 to almost 20% by July 2024.
- SK Hynix (000660:KS) is virtually the sole supplier of HBM chips to Nvidia, used in TSMC-produced AI training chips in Taiwan.
- Higher export value per kilogram for memory semiconductors to Taiwan, outpacing exports to other regions, implies that more expensive HBM chips are shipped to the region.
- Aicel provides bi-weekly updates on Korea's memory semiconductor exports to Taiwan, offering insights into AI chip delivery trends.
Korea's Memory Semiconductor Exports to Taiwan: A Key Indicator for Nvidia
Korea’s memory semiconductor exports to Taiwan have shown a significant upward trend over the past couple of years. Starting with less than 6% of Korea's memory exports in December 2021, this figure surged to nearly 20% by July 2024. Especially for recent few months, this trend starkly contrasts with the overall cyclical nature of Korea’s memory semiconductor exports, where exports to Taiwan have outperformed the general trend, indicating a robust demand specific to the Taiwanese market.
HBM Demand: Driving Korea’s Export Growth and Nvidia’s Revenue
The rising demand for High Bandwidth Memory (HBM) would be a major factor behind this export growth. HBM, a specialized high-performance memory type, is crucial for AI computing, offering faster data transfer speeds and greater bandwidth compared to standard memory types like DDR5. Unlike the standard memory types, HBM is highly customized to optimize specific AI GPUs or AI accelerators.
Nvidia relies heavily on TSMC in Taiwan for producing its most advanced AI training chips, with SK Hynix serving as nearly the sole supplier of HBM chips to Nvidia. The demand for these specialized memory chips, which are more expensive than standard DRAM, may be observed by a significant increase in the export value per weight of Korea’s memory semiconductors to Taiwan.
Nvidia’s Data Center Revenue Growth: A Reflection of HBM Demand
In the first quarter of FY22, Nvidia’s data center revenue stood at $2 billion, accounting for 36% of its total revenue. Fast forward to Q1 FY25, data center revenue has surged to $22.6 billion, now representing 87% of Nvidia’s total revenue. This growth aligns closely with the increasing export volume and value of memory semiconductors to Taiwan, highlighting the interconnectedness of Nvidia’s data center growth and the demand for advanced memory semiconductors.
Investment Insights: Tracking Memory Exports for AI Exposure
Investors seeking exposure to AI computing can find valuable insights by monitoring the demand for customized memory, particularly HBM chips. Korea's memory semiconductor exports to Taiwan may serve as a meaningful indicator of Nvidia’s AI chip deliveries, making Aicel’s bi-weekly export data an essential tool for strategic investment evaluations.
Conclusion: Strong HBM Demand Boosting Nvidia's Revenue Supported by Korean Exports
This analysis reveals a strong correlation between Nvidia's data center revenue growth and the rising demand for HBM chips, evidenced by Korea's increasing memory semiconductor exports to Taiwan. Aicel Technologies' data provides continuous insights, helping investors track key trends in AI semiconductor demand and Nvidia’s performance.
This article is also posted on Linkedin.
