NVIDIA’s H20 Under Fire: Could U.S. Restrictions Go Even Further? 🚨
Welcome, AI & Semiconductor Investors,
NVIDIA’s H20 Under Fire: Could U.S. Restrictions Go Even Further? 🚨 Reports suggest the U.S. is eyeing tighter export controls on NVIDIA’s H20,
We also dive into Qorvo’s strategic shift away from mass-tier Android in favor of high-margin defense and premium smartphone markets, and ASML’s record-breaking quarter, as AI demand fuels the next wave of semiconductor innovation. Let’s break it down…
What The Chip Happened?
✨ NVIDIA’s H20 Under Fire: Could Tighter China Curbs Be Next?
🛡️ Reshaping the RF Landscape: Qorvo’s Defense-Driven Surge
⚡ ASML Aims High: Record Quarter & AI-Driven Outlook ⚡
Read time: 7 minutes
NVIDIA (NASDAQ: NVDA)
✨ NVIDIA’s H20 Under Fire: Could Tighter China Curbs Be Next?
What The Chip: Trump officials are reportedly exploring even stricter controls on NVIDIA’s H20 GPU exports to China. This specialized chip, built to meet U.S. export rules, may now face new restrictions—potentially squeezing NVIDIA’s future sales in one of its largest markets.
Details:
🔎 Scaled-Down, Still Powerful: The H20 GPU offers 96 GB of HBM3 memory and 4.0 TB/s bandwidth, tweaked to comply with export limits while retaining robust AI performance.
⚖️ AI Diffusion Rule: New U.S. measures could broaden the ban to about 150 countries, potentially curbing global AI collaboration and triggering parallel non-U.S. chip ecosystems.
⚠️ Regulatory Whiplash: NVIDIA has navigated repeated policy shifts, creating “defeatured” chips for China. But each new round of restrictions adds uncertainty for future product plans.
🗣️ Management Concern: Company execs emphasize the need for “balance between national security interests and the promotion of technological advancement.” NVIDIA fears overreaching export restrictions will hamper R&D and disrupt supply chains.
🌏 China Demand Remains: Despite all the hurdles, H20 adoption in China continues to grow, reflecting continued hunger for advanced AI hardware.
Why AI/Semiconductor Investors Should Care: A ramp-up in export controls could limit NVIDIA’s access to a massive market, impacting its revenue and R&D investments. Yet the company’s knack for adapting designs to meet compliance shows resilience. Investors should watch for how fresh restrictions alter global AI chip competition—and whether NVIDIA can keep innovating in a heavily scrutinized environment.
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Qorvo, Inc. (NASDAQ: QRVO)
🛡️ Reshaping the RF Landscape: Qorvo’s Defense-Driven Surge
What The Chip: Qorvo’s Q3 FY2025 results show continued strength in Defense & Aerospace but a strategic shift away from lower-margin mass-tier Android. Management highlighted improving gross margins, steady progress with top-tier smartphone customers, and double-digit growth ambitions in its other segments.
Details:
🚀 Defense & Aerospace Momentum: Qorvo posted a record quarter in Defense & Aerospace. CEO Bob Bruggeworth said, “We are supporting next-gen radar and non-terrestrial networks, providing advanced RF packaging that’s truly unique.” This business is now on track for continued double-digit growth.
💼 Divesting Silicon Carbide: Qorvo completed the sale of its silicon carbide unit, contributing just under $30M in annual revenue. CFO Grant Brown called the divestiture “margin-accretive,” helping Qorvo focus on higher-value solutions and reduce cost overhead.
📉 Exiting Mass-Tier Android: Management reiterated that the lower-margin mid-range 5G Android market is shrinking faster than anticipated. Qorvo plans to phase out that segment, targeting premium and flagship tiers instead. This move is expected to improve gross margin by reducing revenue variability and freeing up resources.
📱 Largest Customer Still in Focus: Apple remains over 50% of Qorvo’s mobile revenue. Qorvo expects “content gains” in upcoming models, weighted more heavily toward Pro devices. Bruggeworth noted they are “engaged in more product programs than ever before” with Apple.
🏭 Optimizing Cost Structure: The company implemented a significant workforce reduction primarily tied to Android RF. It is also moving certain internal gallium arsenide (GaAs) production to its Oregon facility to improve utilization. Brown highlighted plans for “150 basis points of gross margin expansion” next fiscal year despite roughly flat total revenue.
📊 Shareholder Returns: Qorvo ended the quarter with $770M in cash, generating $214M in operating cash flow. The company bought back $100M of its stock at an average $73/share in Q3, and it has no near-term bond maturities following the retirement of $412M in notes.
Why AI/Semiconductor Investors Should Care: Qorvo’s pivot toward premium smartphone content and robust Defense & Aerospace programs underscores a strategic realignment for sustainable margins. Its exit from mass-tier Android releases capital for growth in AI-driven infrastructure, ultra-wideband, and next-gen radar. For investors, Qorvo’s combined focus on R&D efficiency, high-value partnerships, and defensive end markets sets the tone for a longer-term upside story.
ASML Holding N.V. (NASDAQ: ASML)
⚡ ASML Aims High: Record Quarter & AI-Driven Outlook ⚡
What The Chip: ASML just released its fourth-quarter and full-year 2024 earnings, reporting record net sales of €9.3 billion for Q4 and €28.3 billion for the year. Leadership underscored the accelerating influence of AI-related demand on advanced lithography equipment.
Details:
🔍 Impressive Q4 Growth: Net sales reached €9.3B, beating ASML’s own outlook. CFO Roger Dassen highlighted better-than-expected upgrades and lower-than-planned High-NA costs driving a 51.7% gross margin.
⚡ Full-Year 2024 Highlights: Total net sales hit €28.3B (up from €27.6B in 2023), with a net income of €7.6B. CEO Christophe Fouquet commented that this strong performance showed “yet another record year,” crediting robust demand in the AI and HPC space.
📈 AI Boost: Management emphasized AI’s growing role in pushing advanced chip development. Fouquet noted that AI-related logic and memory requirements have “created a shift in the market dynamics,” potentially driving more growth in 2025.
🌏 China Normalizing: After a surge in 2023–2024 from clearing backlog, China’s revenue portion is expected to return to a “more normal” share (in the low 20% range). Dassen pointed to ongoing geopolitical considerations and the latest export control regulations as additional variables.
🏭 Product Milestones: ASML has shipped its latest extreme ultraviolet (EUV) systems, including three High-NA machines. “Customers have now run over 10,000 wafers on High-NA systems,” Fouquet said. The company also shipped next-gen DUV and e-beam inspection tools to meet advanced-node manufacturing needs.
💰 Dividend & Buybacks: ASML plans a total 2024 dividend of €6.40 per share (up ~5% from last year). While no shares were repurchased in Q4 under its current program, the company maintains the ability to execute share buybacks as part of its capital returns strategy.
⚠️ Potential Risks: Dassen cautioned about “pushouts” if customers adjust capacity plans. Export restrictions remain an overhang, though current guidance already reflects newly updated measures.
Why AI/Semiconductor Investors Should Care: ASML’s lithography tools sit at the heart of advanced semiconductor production, especially EUV systems for next-gen AI and high-performance computing chips. Strong quarterly results amid market shifts underscore how AI demand continues to reshape capex priorities, while geopolitical and supply-chain uncertainties could still affect timelines. Investors watching advanced logic and memory nodes will find ASML’s technology roadmap critical for gauging the broader semiconductor recovery and future growth potential.
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Disclaimer: This article is intended for educational and informational purposes only and should not be construed as investment advice. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions.
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[Paid Subscribers] ASML’s Record-Breaking Quarter and 2025 Roadmap
Executive Summary
ASML Holding N.V. (ASML) has posted another milestone year, closing 2024 with record sales and notable achievements in next-generation lithography systems. In its recent fourth-quarter (Q4) earnings announcement, the company revealed Q4 net sales of EUR 9.3 billion, beating earlier guidance. For the full year, ASML recorded EUR 28.3 billion in revenue, with gross margins of 51.3% and net income reaching EUR 7.6 billion. These metrics underscore the company’s central position in advanced semiconductor manufacturing equipment—tools used by chipmakers worldwide to print incredibly fine circuit patterns on silicon wafers.
Management emphasized several standout developments for the quarter, highlighting the increased contribution from installed base revenue (services and upgrades on existing machines), which reached EUR 2.1 billion in Q4. According to Chief Financial Officer (CFO) Roger Dassen, “Q4 was a record quarter for ASML. 2024 is yet again a growth year and therefore, yet again, from a revenue perspective, a record year for ASML.” Meanwhile, CEO Christophe Fouquet noted the powerful effect that Artificial Intelligence (AI) demand is having on advanced chip production. AI-driven data center needs in particular have reinforced demand for ASML’s leading-edge lithography systems, including Extreme Ultraviolet (EUV) scanners that enable manufacturing of the world’s most advanced semiconductors.
Looking ahead to 2025, management provided guidance for total net sales between EUR 30 billion and EUR 35 billion, with gross margins projected at 51%–53%. The company expects its advanced EUV tools to see stable or rising demand from chipmakers scaling up capacity for AI and other high-performance applications. That said, leadership also acknowledged short-term uncertainties, including macroeconomic conditions, geopolitical export controls, and the potential for uneven demand across the memory and logic segments. Despite these hurdles, the backlog of EUR 36 billion heading into 2025 underscores sustained demand for ASML’s core product lines.
Growth Opportunities
ASML sees several promising areas fueling its next stage of expansion, primarily driven by the growing AI market. Christophe Fouquet, President and Chief Executive Officer (CEO), stated, “AI is creating a shift in the market. We have seen customers benefiting very strongly, while others maybe less.” Below are key focal points for ASML’s near-term and mid-term growth.