Nvidia Shares Tumbles as Japanese Rivals Gain Ground in AI Chips

Shares of Nvidia Corp. (NVDA, Financial) fell more than 3% on Friday as investors worried about growing competition from Japan’s semiconductor companies;

Shares of Nvidia Corp. (NVDA, Financial) fell more than 3% on Friday as investors worried about growing competition from Japan’s semiconductor companies; Japan’s Advantest renewed its leadership in chip testing equipment. With advancements in generative AI pushing demand, the global market is now dominated by Advantest , where the U.S. rival Teradyne (TER, Financial) commands about 50%, according to sources.

SoC testing tool revenue is expected to climb 32 percent to JPY 324 billion ($2.1 billion) by March 2025, says the company. For such advanced AI chip processes as chiplets and 3D packaging, highly accurate and efficient tools are essential to yield improvement.

Advantest’s fiscal year 2024 R&D investments came in at JPY 65.5 billion ($424.5 million), illustrating the importance that is placed on innovation by Advantest. Much greater profitability has been made possible through its R&D efficiency.

Advantest CEO Douglas Lefever, seeing continued strong growth in AI chip demand, views the technology as positive for the industry. While Nvidia falls, that speaks to the changing market dynamic around evolving semiconductor technologies.