By Adam Clark

Nvidia seems to be on the rebound from the DeepSeek scare. A sales boost for its key chip supplier Taiwan Semiconductor Manufacturing could help that continue.

Nvidia shares dropped 0.9% to $128.73 in after-hours training on Friday, after the stock rose 0.9% during the session.

The stock has bounced off the lows of around $116 reached in the wake of Chinese company DeepSeek's demonstration of low-cost AI models. That has been helped by big spending commitments from its Western rivals.

Between them, Amazon.com, Google-parent Alphabet, Microsoft and Meta Platforms guided for around $325 billion in capital expenditures in their recent earnings reports, with much of that to be spent on AI infrastructure.

Nvidia will report its own earnings on Feb. 26.

There was mixed news to start the week from Nvidia's key supplier Taiwan Semiconductor Manufacturing, or TSMC. The Taiwanese chip manufacturer said its revenue for January came to around 293.29 billion New Taiwan dollars ($8.93 billion), up 36% from the same month a year before. However, it said it expects its first-quarter revenue to be closer to the lower end of its guidance range of $25 billion-$25.8 billion due to effects of an earthquake that hit Taiwan on Jan. 21.

"A certain number of wafers in process were impacted and had to be scrapped due to the earthquake and aftershocks... The Company is making every effort to recover the lost production, and there is no change to our full-year outlook," TSMC said in a statement.

TSMC -- and Nvidia -- have struggled to meet demand for AI chips. TSMC management has said it intends to more than double its advanced chip-packaging capacity, called CoWoS, by the end of 2025. CoWoS is needed to make Nvidia's highest-performing AI chips.

Write to Adam Clark at adam.clark@barrons.com

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February 10, 2025 04:59 ET (09:59 GMT)

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