Financial Data and Key Metrics Changes - Total revenue for Q2 2026 was $46.7 billion, exceeding expectations and showing sequential growth across all market platforms [5][32] - Data center revenue grew 56% year-over-year, despite a $4 billion decline in H20 revenue [5][12] - GAAP gross margin was 72.4%, while non-GAAP gross margin was 72.7%, benefiting from previously reserved H20 inventory [30][32] Business Line Data and Key Metrics Changes - Data center revenue reached record levels, with the Blackwell platform growing sequentially by 17% [6][19] - Gaming revenue was a record $4.3 billion, a 14% sequential increase and a 49% year-over-year increase, driven by the ramp of Blackwell GeForce GPUs [24][25] - Professional visualization revenue increased by 32% year-over-year, reaching $601 million, fueled by high-end RTX workstation GPUs [27] Market Data and Key Metrics Changes - China represented a low single-digit percentage of data center revenue, while Singapore accounted for 22% of billed revenue, primarily from US-based customers [24] - Networking revenue reached a record $7.3 billion, with a 46% sequential and 98% year-over-year increase [19][20] Company Strategy and Development Direction - The company is focused on capitalizing on the AI infrastructure opportunity, estimating $3 to $4 trillion in spending by the end of the decade [6][42] - The transition to the GB300 architecture is seamless, allowing for easy deployment by cloud service providers [7][10] - The company aims to maintain its leadership in AI technology and compete globally, emphasizing the importance of developer support [12][54] Management's Comments on Operating Environment and Future Outlook - Management highlighted the significant growth potential driven by reasoning agentic AI and the increasing demand for AI infrastructure [39][60] - The geopolitical environment remains a concern, particularly regarding H20 shipments to China, with potential revenue of $2 billion to $5 billion if issues are resolved [11][46] - The company expects total revenue for Q3 2026 to be around $54 billion, with continued growth in data center and networking segments [32][33] Other Important Information - The company returned $10 billion to shareholders through share repurchases and dividends, with a new $60 billion share repurchase authorization approved [31] - The company is on track to achieve over $20 billion in sovereign AI revenue this year, more than double that of last year [19] Q&A Session Summary Question: What is the vision for growth into 2026? - Management emphasized the growth drivers from reasoning agentic AI and the significant increase in computation requirements for these models [38][42] Question: What needs to happen for H20 shipments to China? - Management indicated that geopolitical issues need resolution, and there is potential for $2 billion to $5 billion in shipments if licenses are approved [46][47] Question: How does NVIDIA view the competitive landscape with ASICs? - Management noted that while many ASIC projects are initiated, few reach production due to the complexity of accelerated computing compared to general-purpose computing [48][50] Question: What is the opportunity for Spectrum XGS? - Management highlighted that Spectrum XGS is crucial for connecting multiple data centers and AI factories, with significant revenue potential [73][78] Question: How will revenue be apportioned across Blackwell, Hopper, and networking? - Management stated that Blackwell will drive the majority of growth, with continued sales of Hopper systems [80][81] Question: What is the long-term outlook for the China market? - Management estimated a $50 billion opportunity in China this year, with potential for 50% annual growth [67][70]

Core Viewpoint - The competition for TSMC's CoWoS capacity is intensifying as major tech companies, particularly NVIDIA, are vying for advanced packaging technology to support their AI strategies. [1] Group 1: Market Demand and Growth - Global demand for CoWoS is projected to reach 1 million wafers by 2026, indicating a robust growth of 40% to 50% in the cloud AI semiconductor market. [1] - NVIDIA is expected to consume 595,000 wafers, capturing approximately 60% of the total global demand. [2][4] - The capital expenditure of cloud service providers (CSPs) is rising, with Google increasing its 2025 budget from $75 billion to $85 billion, further accelerating investments in 2026. [1][5] Group 2: Company-Specific Insights - NVIDIA's total demand for CoWoS wafers is forecasted at 595,000, with 515,000 wafers sourced from TSMC, primarily for its next-generation Rubin architecture chips. [2][4] - AMD is projected to secure 105,000 wafers, representing about 11% of the market share, with 80,000 wafers produced by TSMC for its MI355 and MI400 series AI accelerators. [2][4] - Broadcom is anticipated to demand 150,000 wafers, accounting for 15% of the market, mainly for custom chips for major clients like Google and Meta. [2][4] Group 3: Financial Implications for TSMC - TSMC's CoWoS monthly capacity is expected to increase significantly from 32,000 wafers in 2024 to 93,000 wafers by the end of 2026, driven by strong customer demand. [7] - AI-related revenue is projected to constitute 25% of TSMC's total revenue by 2025, positioning the company as a key beneficiary in the ongoing AI wave. [7]

Core Insights - Nvidia is redefining the characteristics and functionalities of future power electronic devices, particularly for AI data centers, by designing a new powertrain architecture [1][4] - The shift towards 800V high voltage direct current (HVDC) data center infrastructure is being supported by various semiconductor suppliers and power system component manufacturers [1][5] Group 1: Nvidia's Influence on Power Electronics - Nvidia's push for AI data centers is creating momentum for Gallium Nitride (GaN) technology, similar to the impact of Silicon Carbide (SiC) during Tesla's rise [2] - Nvidia is collaborating with multiple partners, including Infineon, MPS, Navitas, and others, to transition to 800V HVDC systems [1][4] Group 2: Technical Requirements and Innovations - The new 800V HVDC architecture will necessitate a range of new power devices and semiconductors to meet the demands of AI data centers [5] - Infineon is developing converters to demonstrate the advantages of 800V to lower voltages, focusing on power density and efficiency [6][8] Group 3: Competitive Landscape - Other companies, such as Navitas Semiconductor, are also capitalizing on Nvidia's drive for AI data centers by leveraging their expertise in GaN technology [13] - The competition is intensifying as companies like Infineon and Navitas seek to provide solutions for Nvidia's evolving power infrastructure needs [13][14] Group 4: Market Predictions - Yole Group predicts that GaN will experience faster growth than SiC in the AI data center market, with GaN devices having higher voltage potential [16] - The shift in Nvidia's power infrastructure strategy may render existing open computing projects obsolete, leading to a fragmented market [15]

Core Viewpoint - NVIDIA's recent earnings report did not meet market expectations, leading to a decline in AI stocks, with supply chain sources indicating a reduction in advanced packaging orders from TSMC [1][2]. Group 1: NVIDIA's Product and Market Dynamics - NVIDIA's CEO Jensen Huang emphasized strong market demand for the Blackwell series, with gross margins expected to remain around 70% during the ramp-up phase [1]. - The upcoming GTC event will showcase new products like Blackwell Ultra and GB300, with expectations for faster integration based on previous experiences with GB200 [2]. - The transition from the Hopper architecture to Blackwell architecture is underway, with production challenges noted due to lower yield rates of the new CoWoS-L packaging technology [4]. Group 2: TSMC's Capacity and Order Adjustments - TSMC's advanced packaging capacity remains near full utilization, but there are indications of a potential decrease in orders as the lifecycle of NVIDIA's previous GPU generation ends [1][3]. - Reports suggest that TSMC's CoWoS average monthly capacity has dropped to 62,500 wafers, below the expected 70,000 wafers, with NVIDIA's monthly orders also reduced from approximately 42,000 to 39,000 wafers [3]. - Despite rumors of order cuts, TSMC has denied these claims, stating that demand for CoWoS remains strong and that any perceived reductions may be due to process upgrades and product transitions [2][3]. Group 3: Future Prospects and Industry Trends - TSMC is ramping up production at its newly acquired facilities to meet the growing demand for advanced packaging technologies like CoWoS-L and SoIC [4]. - The industry anticipates that the new Rubin GPU and Vera CPU developments will contribute positively to market dynamics, with production expected to begin early next year [2].