Texas Instruments and Infineon have joined NVIDIA's supply chain as new suppliers, marking a significant expansion of these analog chip leaders into the AI sector. Historically, companies entering NVIDIA's supply chain have experienced substantial stock price increases, as seen with SK Hynix and Foxconn. As a result, investors anticipate similar growth for Texas Instruments and Infineon.
With NVIDIA's GB200 AI GPU server systems nearing mass production, the company is seeking new suppliers for core components to reduce costs and enhance quality control. This competitive trend is gaining momentum across the supply chain. Currently, Texas Instruments and Infineon provide voltage regulators, a role previously dominated by Monolithic Power Systems.
Monolithic Power Systems now supplies integrated base controllers, a domain once exclusive to Delta Electronics, indicating NVIDIA's effort to broaden its AI server supply chain. This strategic shift aims to improve quality control and reduce supply costs further.
In light of these developments, Texas Instruments stock surged to near-record highs. Infineon's ADRs and Monolithic Power Systems also saw gains, while NVIDIA shares dipped slightly after a strong upward trend over five days.
Texas Instruments, the world's leading analog chip manufacturer, plays a crucial role in electronic devices by converting power to various voltages. Its chips are essential in electric vehicles for power management, battery management, sensor interfaces, and more. The company's extensive customer base and product range make it a key indicator of varied industry demands.
Infineon also holds a pivotal position in analog chips, particularly in automotive electronics and power management. Its products are integral to automotive and energy management solutions, emphasizing power semiconductors and high-efficiency devices.
Despite the current challenges faced by analog chip manufacturers like inventory overages and reduced orders post-pandemic, joining NVIDIA's AI server supply chain presents a promising opportunity. This move offers a new growth path aligned with the burgeoning global AI data center construction trend, potentially revitalizing performance amid the electric vehicle sector's ongoing struggles.