On February 9, local time, the U.S. semiconductor sector rose collectively, with Nvidia’s stock price rising 3.6%, reaching a new high. As of the close of the day, Nvidia's market value exceeded US$1.78 trillion, approaching the market value of Google and Amazon of approximately US$1.8 trillion. In less than two months so far this year, Nvidia’s stock price has increased by more than 46%. On the same day, the share prices of chip companies such as AMD, Qualcomm and Intel also rose by nearly 2%.

The collective rise in U.S. chip stocks is related to the implementation of U.S. government investment funds for chip research and development. On February 9, the U.S. Secretary of Commerce announced on its website that the next phase of investment in the CHIPS R&D program is expected to exceed US$5 billion, including the construction of the National Semiconductor Technology Center (NSTC).


CHIPS is the US chip research and development plan, and the construction of NSTC is the core part of the US chip research and development plan. Other CHIPS research and development projects include: the US National Advanced Packaging Manufacturing Project, the CHIPS Metrology Project and the CHIPS US Manufacturing Research Institute. These programs build the necessary innovation ecosystem in the United States to ensure that U.S. semiconductor manufacturing facilities can produce the most complex and advanced technologies in the world.

Promoting chip research and development is an important part of the US "Chip and Science Act". The bill was approved by the U.S. Congress in August 2022, including US$39 billion in semiconductor production subsidies and US$11 billion in chip research and development subsidies, involving a total subsidy fund of more than US$50 billion. The U.S. Commerce Department also plans to provide funding for chip manufacturing within two months.

According to U.S. Secretary of Commerce Raimondo, NSTC will conduct research and prototype design of advanced semiconductor technologies. The U.S. Department of Commerce is currently negotiating with some companies, hoping to promote the development of high-end semiconductor manufacturing-related supply chains. The center will also establish an investment fund to help emerging semiconductor companies advance technology commercialization. According to reports, these investments are all investments in new-generation technologies and are unprecedented in terms of scale and complexity.

The U.S. government has invested huge subsidies in chip R&D and manufacturing at a time when the semiconductor industry is undergoing tremendous changes. Driven by the demand for artificial intelligence chips, many technology companies have begun to increase their efforts in chip research and development, especially cloud computing giants. Google, Amazon and Microsoft have all disclosed their plans to develop self-developed chips.

Currently, NVIDIA still controls more than 80% of the high-end AI chip market. Recently, it was reported that Nvidia is establishing a new business unit mainly to help cloud computing companies design customized chips including AI chips. However, Nvidia has not responded yet.

According to forecast data from research firm 650Group, the data center custom chip market will grow to US$10 billion in 2024 and double by 2025. Currently, the data center custom chip design market is mainly dominated by Broadcom and Marvell.