Chip stocks led by Nvidia Corp (NASDAQ:NVDA), Advanced Microdevices, Inc (NASDAQ:AMD), Qualcomm Inc (NASDAQ:QCOM), Micron Technology, Inc (NASDAQ:MU) and Arm Holdings Plc (NASDAQ:ARM) traded lower on Tuesday after reports of Taiwan Semiconductor Manufacturing Co (NYSE:TSM) plans to increase the price of its AI chip manufacturing services.
Shares of TSMC also traded lower on Tuesday.
US Big Tech stocks harboring AI ambitions also traded lower on Tuesday Microsoft Corp (NASDAQ:MSFT), Metaplatforms, Inc (NASDAQ:META), Alphabet Inc (NASDAQ:GOOGL), Apple Inc (NASDAQ:AAPL), and Amazon.Com, Inc (NASDAQ:AMZN).
TSMC’s new chairman, CC Wei, has already discussed his price increase plans with Nvidia CEO Jensen Huang, Nikkei Asia reports.
Wei justified passing on the higher value of its AI chips to its customers, like Nvidia, who were already charging a premium for their products, taking credit for their AI moat.
Huang recently articulated the “$100 trillion” potential for AI during his speech at the Taipei Computex technology fair.
However, Wei ruled out the possibility of migrating its factories from Taiwan despite political tensions as the island accounts for 80 to 90 percent of its production capacity.
Semiconductor sector ETFS, including VanEck Semiconductor ETF (NASDAQ:SMH) and iShares Semiconductor ETF (NASDAQ:SOXX) is trading lower on Tuesday. US Big Tech ETFs, Including Invesco QQQ Trust, series 1 (NASDAQ:QQQ), and SPDR Select Sector Fund (NYSE:XLK) fell on Tuesday.
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