As Nvidia Touches $4 trillion Market Cap, Chip Shortage Remains Key Global Challenge
Shares in the chipmaker rose by as much as 2.4 percent to $164 on Wednesday, as the company continues to benefit from the ongoing surge in demand for the tech that powers AI.
(Photo: SBR)
SANTA CLARA, Calif., July 11, 2025 — As the global semiconductor chip shortage was normalizing last year, after witnessing its peak during 2020-2023, Nvidia CEO Jensen Huang was quite frank in admitting that AI chip shortage was making his customers tense and emotional.
A year later, the anxious atmosphere surrounding Nvidia and Jensen last year, seemed to have subdued now and is replaced by palpable exuberance.
On Wednesday, Nvidia became the first public company in the world to reach a market value of $4 trillion, beating Apple and Microsoft to the symbolic milestone.
Nvidia touched the mark briefly on Wednesday during trading.
Shares in the chip-maker rose by as much as 2.4 percent to $164 on Wednesday, as the company continues to benefit from the ongoing surge in demand for the tech that powers AI.
The US-based company reached a market value of $1 trillion for the first time in June 2023, and has move northwards with a sharp trajectory since then.
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In the words of Mark Zuckerberg, Nvidia CEO Jensen is the "the Taylor Swift of tech," reflecting his celebrity status, especially in Taiwan, where fans treat him like a rock star.
Jensen Huang met with President Donald Trump at the White House on Thursday, days before his scheduled China visit.
The Nvidia representative, contacted by several media outlets, is said to have declined a comment, on what the meeting between its CEO and Trump was about.
Notably, the export control of Nvidia’s AI chip by President Trump led government has put the chip-maker into a tight spot.
The restriction on exports was based on US government’s concern over ‘national security reasons’.
Meanwhile, President Trump praised Nvidia stock in a social media post Thursday morning.
“Nvidia is up 47% since Trump tariffs. USA is taking in Hundreds of Billions of Dollars in Tariffs,” Trump posted on Truth Social. “Country is now ‘back.’”
Overcoming Chip Shortage Hurdles
Chips, which are a small but a pivotal component critical to digital transformation, experienced a major shortage between 2020-2023, a period marked by the fallout of COVID19 pandemic.
While the chip supply chain, largely normalized in 2023, its aftereffects continued to impact the sectors dependent on it.
CNBC had reported that Elon Musk ordered Nvidia to divert thousands of chips from publicly traded Tesla to privately-held X (formerly known as Twitter) and xAI.
Efforts by the former President Joe Biden’s government of introducing CHIPS and Science Act of 2022, was aimed to boost localization of chip manufacturing in the US. Huge subsidies were earmarked, to strengthen domestic supply chain and decrease threat of foreign adversaries.
However, even with the $52 Billion investment in government subsidies, US market share is only expected to grow to 14 percent.
Complicated Web of Chip-making
While large conglomerates have always dominated the discussion around chips and AI, the reality is that there is a complicated network of companies, from Asia to US that are pivotal in this supply chain.
This network of companies spans from wafer manufacturers based in South Korea and Germany to design software providers in the US, chemical companies in Asia, and semiconductor manufacturers in Taiwan.
Before AI chip designers such as Nvidia can ship out their designs to semiconductor manufacturers, they must create them.
The popular belief that the global semiconductor supply chain is concentrated in Asia is a misconception.
Most Electronic Design Automation (EDA) firms are in America. Consequently, the journey of an AI chip starts with products made by an American or European company.
EDA companies contribute to chip design at the supply chain's start and post-manufacturing performance verification.
Consequently, their products are essential to ensuring that AI chips meet high-end performance requirements.
Goldman Sachs recently released a research report, covering multiple American digital semiconductor and EDA software companies for the first time, pointing out significant investment opportunities among commercially sustainable and customized chips, and EDA suppliers in AI-related capital expenditures.
While the chip supply chain, largely normalized in 2023, its aftereffects continued to impact the sectors dependent on it.
Inputs from Saqib Malik
Editing by David Ryder
