Nvidia to invest US$3.5 billion in MediaTek

Nvidia Corp is investing US$3.5 billion into MediaTek Inc (聯發科), deepening collaboration with the Taiwanese chip designer at a time when it’s working to persuade more companies to build chips that plug into its dominant data center ecosystem.

Nvidia will buy bonds convertible into MediaTek shares, the companies said in a joint statement yesterday.

The investment broadens a partnership between the two chip designers that will see MediaTek using NVLink Fusion and the newly announced NVHBM technology as part of an Nvidia tech suite to help components communicate more seamlessly in data centers. The Taiwanese company is trying to challenge Broadcom Inc and Marvell Technology Inc by helping owners of data centers create their own components.

For Nvidia, the new agreement is the latest effort to ensure the future of artificial intelligence (AI) is built around its hardware platform and standards.

The US chip giant has been building data center interconnect systems like NVLink Fusion and partnering with the likes of MediaTek to ensure it maintains a central role in the entire hardware chain, not just with its class-leading AI accelerators.

The MediaTek agreement follows a similar announcement by Amazon.com Inc, which agreed to deploy an additional 2 million Nvidia components. Critically, Amazon also pledged to use Nvidia’s connection technology with its in-house chips.

Nvidia chief executive officer Jensen Huang (黃仁勳), who was born in Taiwan, is tightening ties with a company working to reduce its reliance on the smartphone market. MediaTek earlier this year secured a partnership with Alphabet Inc’s Google, and is gaining credibility as a design partner to major tech firms that are seeking to build their own AI chips. That momentum has led the chipmaker’s market value to roughly triple in recent months.

The agreements with MediaTek and Amazon give Nvidia the opportunity to retain its central role in the build-out of AI data centers even when companies are deploying chips designed to replace its main offerings. The deal is yet another example of Nvidia’s leadership investing in customers, rivals and other companies involved in the AI industry. Concern about the seemingly circular nature of those investments has percolated in investor circles, though Nvidia has strongly disputed the idea it’s creating false demand.

MediaTek already works with Nvidia on the US chipmaker’s nascent effort to get into the laptop industry. The Taiwanese company is helping with Nvidia’s RTX Spark product for that market.

MediaTek has also signaled that it plans to hire aggressively to better capture business opportunities from the AI boom. Forecasting AI chip revenue of about US$2 billion this year, the company has set the goal of securing as much as 15 percent of an US$80 billion segment of the data center market next year.

China deployed a record number of coast guard, scientific research and other ships near Taiwan’s waters last month, the Coast Guard Administration (CGA) said, as Beijing dials up pressure on Taipei. The coast guard warned of an increasingly severe situation, as analysts say the increased activity is part of China’s bid to map the region for submarine warfare. The number of Chinese ships detected around Taiwan proper soared to a record 244 last month — an average of nearly eight every day, official data showed.

That compares with 55 ships detected in June and 30 in May, and 58 in July last year. In

Taiwan is bracing for heavy rain in the south and rough seas around outlying Lienchiang County (Matsu), as Typhoon Saudel passes north toward eastern China, with forecasters yesterday warning of localized flooding over the next two days. Saudel is expected to pass closest to Taiwan today, when its outer rain bands are forecast to brush past Matsu, before making landfall at about noon in China’s Zhejiang Province and weakening significantly, the Central Weather Administration said.

The storm’s outer bands, combined with strengthening southwesterly winds, are expected to bring heavy rain to southern and southeastern Taiwan today, it said. As the storm approaches Matsu,

LIMITED: The bill’s NT$40bn annual spending cap would prevent Taiwan from effectively building up its drone combat capabilities, National Defense Minister Wellington Koo said The legislature yesterday rejected the Executive Yuan’s NT$210 billion (US$6.62 billion) special budget proposal to buy military drones and instead passed its own plan, which earmarks NT$40 billion per year over six consecutive years. The Executive Yuan said its plan to buy about 210,000 drones by 2031 could not wait, as the wars in Ukraine and Iran showed the importance of uncrewed systems in modern warfare amid a rising threat from China.

However, the Chinese Nationalist Party (KMT) and Taiwan People’s Party (TPP) used their opposition majority to pass a bill providing NT$240 billion through annual budgets over six years, with annual

INCREASING IMBALANCE: The percentage of working-age people is expected to shrink to 42.3% of the population, while older people would comprise 52.9%, the agency said Taiwan’s population is projected to shrink by almost half over the next five decades, intensifying labor shortages and placing a growing drag on economic growth as the technology-intensive economy confronts a rapidly aging workforce. The population is expected to fall to 12.15 million by 2075, a 48 percent decline from this year, National Development Council projections released yesterday showed.

The decline would fundamentally alter Taiwan’s workforce. From 2037, more than half of the working-age population is projected to be aged between 45 and 64, signaling the end of an era when the economy could rely on a relatively large labor force. The shift