Abstract:
On September 1, Nvidia announced that it would invest US$3.5 billion in chip manufacturer MediaTek. Ming-Chi Kuo, a well-known analyst at Tianfeng International Securities, analyzed this and said that this is a cooperation in which each side gets what they need. MediaTek will use this to move from chip design to system design, while Nvidia will extend the rack-level ecology to the customized chip market.
Nvidia and MediaTek announce cooperation
Ming-Chi Kuo posted on X on Tuesday that MediaTek’s latest announcement announced the deepening of long-term cooperation with Nvidia. The recurring term "rack-scale" is the key to understanding the announcement and directly verified the core judgment he made more than two months ago: MediaTek has internally upgraded the strategic positioning of its AI business from "IC/ASIC (Integrated Circuit and Application Specific Integrated Circuit) design" to "system-level design."
He pointed out that this announcement also further explains how MediaTek will implement this new positioning: by cooperating with NVIDIA, it will introduce customized chips/XPUs (various processors) into NVIDIA's mature rack-level ecosystem, so that after the development of customized chips is completed, they can be quickly integrated into rack-level systems that can be deployed in data centers and AI factories.
For MediaTek, Nvidia’s mature rack-level system ecosystem eliminates the need to start from scratch and makes this new strategy more executable.
For Nvidia, MediaTek’s customized chip design capabilities and customer base can help its rack-level ecosystem further extend into the self-developed chip market.
Ming-Chi Kuo said that this also explains why "rack level" is the key word in this announcement: This is where both parties need each other most. MediaTek takes this opportunity to move from chips to systems, while NVIDIA extends the rack-level ecosystem to the customized chip market, creating a win-win situation where both parties can open up new growth space.
As of press time, MediaTek’s stock price has soared 10% today, hitting the daily limit.
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