NVIDIA to Invest 4.7 Trillion Won in Taiwan's MediaTek

[Financial News] NVIDIA Corporation, the world's No. 1 company in artificial intelligence (AI) semiconductors, will invest $3.5 billion, or about 4.7 trillion won, in Taiwan-based fabless chip designer MediaTek to continue a long-term partnership.
According to Taiwanese media outlets such as United Daily News and China Times on the 1st, MediaTek said the previous day that it plans to issue $3.9 billion, or about 5.3 trillion won, in euro convertible bonds (ECB) to raise overseas funds. It added that Big Tech companies NVIDIA and Alphabet, the parent company of Google, will participate in the bond issuance. In particular, it explained that NVIDIA will underwrite about 90% of the offering and deepen follow-up cooperation with the companies.
NVIDIA CEO Jensen Huang said the two sides' cooperation blueprint is a 10-year plan and not a short-term one, dismissing some concerns about a so-called circular deal. MediaTek CEO Rick Tsai said the partnership will help both sides dramatically shorten product launch times for customers around the world. He added that the funds raised will be invested in technology research and development (R&D) and supply chain building.
MediaTek's ECB issuance totals $3.9 billion with a 0% coupon and a five-year maturity, and it is scheduled to be listed on the Singapore Exchange on the 8th. A source said the issuance is the largest ECB ever in Taiwan's capital market and the first case involving two U.S. Big Tech companies. NVIDIA's first investment in a Taiwanese company is drawing particular attention.
The source said the investment by NVIDIA will benefit not only MediaTek but also Taiwan Semiconductor Manufacturing Company Limited (TSMC), the world's largest foundry, and Advanced Semiconductor Engineering, Inc. (ASE), a major Taiwanese advanced packaging company. It is also expected to have a significant impact on Taiwan's semiconductor ecosystem and the development of AI. The source added that NVIDIA's decision is aimed at ensuring future AI is built around the company's own hardware platforms and standards.
[email protected] Reporter Hong Chae-wan Reporter