One global stock stands out as a “unique play” in the Nvidia and artificial intelligence supply chain, according to Jefferies. It’s German semiconductor firm SUSS MicroTec , Jefferies said in a Sept. 17 report, calling it a “hidden gem” among European semiconductor firms. The stock also trades over the counter in the U.S. The investment bank initiated coverage of the stock at a buy rating and a target price of 76 euros ($84). That represents potential upside of about 28%. The firm has “multi-layered exposure” to an advanced packaging technology called Chip-on-Wafer-on-Substrate, said Jefferies, explaining that it’s used to make AI chips. SMHN-FF 1Y mountain SUSS MicroTec Nvidia uses that technology to package its AI graphics processing units, Jefferies noted. “Demand for CoWoS has therefore risen significantly in the last 24 months, as AI adoption has accelerated.” SUSS sells its products to two major high bandwidth memory suppliers and TSMC, to be used in the production of that advanced packaging. TSMC’s largest CoWoS customer is Nvidia, according to Jefferies. Memory chips have been in the spotlight as AI ramps up, as they are used in graphics processing units, which underpin most generative AI tools. “SUSS has multiple layers of CoWoS/NVIDIA exposure,” said the investment bank. The packaging technology needed for the high bandwidth memory called “temporary bonding” presents the “greatest opportunity,” with such orders spiking for SUSS in the third quarter of 2023, said Jefferies. “This segment has seen the strongest uptick in orders since Q3’23, an inflection that is heavily linked to recent growth seen across the NVIDIA/AI supply chain,” the bank wrote. There is a “significant” need for SUSS’ tools given high bandwidth memory’s “multi-layered architecture,” as they enable all layers to fit within the packaging, the bank explained. SUSS has a 55% market share in the area, and is “well placed to benefit” from two growth drivers in the next one to two years: rising CoWoS shipments at TSMC and rising high bandwidth memory layer count, said Jefferies. Since the firm’s exposure to the packaging tech needed for high bandwidth memory is “entirely new,” the potential for upside in orders and revenues is “much more material” than that of other equipment suppliers, said Jefferies. “In addition, we believe SUSS is one of the most attractive CoWoS plays globally since it has much lower competition here than its Advanced Packaging peers,” the bank wrote. Jefferies predicts sales of 471 million euros for fiscal year 2025, implying 16% growth year on year. — CNBC’s Michael Bloom contributed to this report.