July 16, 2025 01:27 AM GMT Semiconductors | North America H20, mi308 are back; FAQs US AI stocks NVDA, AMD, AVGO are likely to receive licenses to ship to China at levels consistent with the prior threshold. We would keep near term expectations in check as outlined below, but it's a significant positive for 2026 for all AI stocks, including our Top Pick NVDA. What happened? Monday night, NVIDIA announced in a blog post (here) that they are expecting to secure US govt licenses to resume shipments of H20 prod ...

Key Takeaways from the China Chips Call Industry Overview - The call focused on the Chinese semiconductor industry, particularly the developments surrounding AI chips from AMD and Nvidia, following the US approval for their shipment to China [1][2] - Key companies discussed include Nvidia, AMD, TSMC, Alibaba, and Inventec [2][6] Core Insights and Arguments - **H20 and RTX 6000 Impact**: - H20 is expected to have a positive incremental impact on China's capital expenditure [2] - The RTX 6000D upgrade is highly anticipated, but there are uncertainties regarding its long-term availability, possibly linked to US-China negotiations [2][3] - **Chip Supply and Demand**: - China is currently facing a shortage of local chips due to SMIC's ramp-up issues, prompting increased purchases of H20 [3] - Nvidia is shifting focus to the B series, which offers higher computing power but lower memory and data transfer speeds [3] - The US is considering increasing H20's data transfer speed to 4TB per second, while the RTX6000 is currently limited to 1.6TB [5] - **Datacenter Capital Expenditure**: - There is potential upside in datacenter AI capital expenditure if inventory levels reach 900K chips, with current estimates at 600K [5] - Growth in CSP sales, particularly at Alibaba Cloud, is accelerating and expected to continue [5][6] - **Beneficiaries in the Supply Chain**: - Inventec is identified as the main beneficiary of H20, with a projected 15% decline in H20 business previously [6] - Other beneficiaries include TSMC, KYEC, Amkor, and AVC, with specific roles in the supply chain [6][7] - **Market Dynamics**: - Bytedance is noted as the most aggressive in deploying AI, with significant chip orders expected by 2025 [19] - Alibaba is ranked highest among BAT companies in terms of benefits from H20, followed by Tencent and Baidu [20] Other Important Insights - **Comparison with Huawei**: - H20's performance is considered superior to AMD's offerings due to its ecosystem advantages, particularly with NVLINK technology [21][22] - The Ascend chips from Huawei are primarily purchased by state-owned enterprises, while internet companies prefer Nvidia [23] - **Production Capacity and Localization**: - SMIC's current production capacity and yield issues are highlighted, with expectations for improvement over the next few quarters [24][26] - There are discussions about the localization of semiconductor manufacturing in China, with potential advancements in 7nm technology by 2028 [15] - **Future Outlook**: - The overall sentiment is cautious, with uncertainties regarding the sustainability of current chip supply and demand dynamics, particularly in light of geopolitical factors [18][27] - **Inventory and Sales Projections**: - There are discussions about the implications of inventory levels on sales guidance, with significant potential sales if H20 inventory can be sold by October [20] This summary encapsulates the key points discussed during the call, providing insights into the current state and future outlook of the Chinese semiconductor industry, particularly in relation to AI chip developments.