Nvidia co-founder and CEO Jensen Huang is in Taiwan this week, where he’s getting a rock star welcome and boosting the stock market.
Huang arrived in Taiwan on Sunday a day after China completed military exercises around the island, which Beijing claims as its territory. Li Xi, spokesperson for The Chinese People’s Liberation Army, said the exercise was a “severe punishment for the separatist acts of the ‘Taiwan Independence’ forces.”
The exercises began on Thursday, but Taiwan’s stock market changed little during the period. The market resumed its ascent Monday after Huang’s arrival, a sign of confidence in Taiwan’s huge chip sector on which the world depends.
Local media have been tracking Huang this week. The leather jacket-clad rockstar CTO was spotted dining with bigwigs from TSMC, Foxconn and Asus.
On Wednesday, Huang also strolled through a night market with Morris Chang, the 92-year-old founder of chip giant TSMC.
He also appears to have taken the time to visit his regular hair salon in Taipei, according to the salon’s Instagram.
Huang is expected to deliver the keynote speech at the Computex technology fair on Sunday.
Other high-profile global technology leaders are also expected to deliver speeches. They include AMD CEO Lisa Su, who is a distant cousin of Huang, Intel CEO Pat Gelsinger, Qualcomm CEO Cristiano Amon, and Arm CEO Rene Haas.
“The PHLX Semiconductor Index matters more than PLA”
The tech-backed rally in Taiwan’s stock market contrasts with growing fears about China’s military activities around the island.
Investors should note that growing tensions between China, Taiwan and the United States will be a “permanent feature of the global landscape,” wrote Rory Green, chief China economist at GlobalData.TS Lombard, in a report released Thursday .
However, for investors, “the PHLX Semiconductor index matters more than the PLA,” Green said, referring to the chip index housed on the Philadelphia Stock Exchange that has gained 24% since the start of the year. It has also increased by almost 50% in the last 12 months.
In Taiwan, the island’s TAIEX stock index has broken records this year as the artificial intelligence frenzy on Wall Street has driven up the share price of U.S. company Nvidia, the most major supplier is TSMC.
The TAIEX index is up nearly 20% year to date and hit a new all-time high on Tuesday.
“In this case, the AI stock theme, physical investment in AI, and the broader recovery in demand for electronic components are driving robust Taiwanese growth and strong stock performance,” Green wrote.
He added that an outright invasion of Taiwan by China is “highly unlikely” due to the high military and economic risk. Military preparations for an invasion would also be evident at least 12 months in advance – as was the case near Ukraine before Russia invaded.
Although a total blockade of Taiwan is a risk, Green said China is probably unwilling to risk the serious economic, financial and military repercussions it would bring, because the East Asian giant is far from ‘be prepared for international isolation.
Green said investors should view any geopolitically driven selloff as an opportunity to get in at a lower price.
“If the macroeconomic backdrop is positive and China is still far from reaching ‘fortress-like’ economic conditions, future sell-offs could provide attractive buying opportunities,” Green wrote.
businessinsider
