🚀 A Mega AI Move: Billions Invested in NVIDIA’s H20 Chips
Welcome, AI & Semiconductor Investors,
Tencent's massive investment in NVIDIA's H20 chips signals an aggressive push to dominate China's AI landscape, setting the stage for intense competition and growth in AI infrastructure.
We also unpack Nova Ltd.'s ambitious plan to organically reach $1B revenue and Semtech's accelerating momentum in data centers and IoT. — Let’s Chip In
What The Chip Happened?
🚀 A Mega AI Move: Billions Invested in NVIDIA’s H20 Chips
🔬 Nova’s Next Frontier: From Metrology Mastery to $1B Revenue Ambition
🏭 Semtech Surges Ahead with Data Center & IoT Innovations
[Nova Investor Day: Advancing Metrology Leadership Through Innovation & Diversification]
Read time: 7 minutes
Tencent (TCEHY)
🚀 A Mega AI Move: Billions Invested in NVIDIA’s H20 Chips
What The Chip: In March 2025, Tencent shook China’s tech sphere with a massive order of NVIDIA’s H20 chips—reportedly worth billions of RMB—to power DeepSeek’s integration into WeChat. This strategic move aims to bolster Tencent’s AI capabilities amid intensifying competition in the Chinese market.
Details:
🤖 Large-Scale Order: Calian News reports that Tencent’s purchase of NVIDIA H20 chips tallies in the billions of RMB, underscoring a strong commitment to AI infrastructure.
💻 Compliance-Focused: The H20 chip was developed specifically for the Chinese market, designed to meet U.S. export restrictions while still delivering high-performance AI computing.
📉 Short-Term Supply Squeeze: The sudden demand from Tencent allegedly created a temporary supply shortage for NVIDIA’s H20, suggesting that AI capacity expansion in China is ramping up faster than expected.
🚀 DeepSeek Driving Demand: Reuters notes that concerns about DeepSeek’s slower growth have flipped, with Chinese companies like Tencent, Alibaba, and ByteDance now increasing chip orders to keep pace with surging AI adoption.
📈 Major Buyers: GuruFocus highlights Tencent and ByteDance as top NVIDIA clients in China—each acquiring around 230,000 chips in 2024—while Microsoft remains the global leader at around 485,000 AI chip purchases.
Why AI/Semiconductor Investors Should Care: Tencent’s high-stakes bet on NVIDIA’s H20 chips highlights intensifying competition in China’s AI industry—and signals a potentially lucrative surge in data center and AI infrastructure spending. While U.S. export restrictions remain a wild card, this move confirms that Chinese tech giants continue to invest heavily in AI, presenting both opportunities and risks for global semiconductor investors.
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Nova Ltd. (NVMI)
🔬 Nova’s Next Frontier: From Metrology Mastery to $1B Revenue Ambition
What The Chip: Nova held its 2025 Analyst/Investor Day on March 13, unveiling a bold plan to reach $1B in annual revenue organically by 2027. Management showcased new products, major market share gains, and an evolving strategy in advanced packaging, logic, and memory.
Details:
🔬 New i580 Platform: Nova introduced its next-gen integrated metrology system for CMP, featuring wafer-edge inspection capabilities. “This new era of bevel inspection and ultra-precise thickness monitoring will help ensure hybrid bonding reliability,” said CEO Gabriel (Gabi) Waisman.
🏗️ Sentronics Acquisition: The recent purchase of Sentronics broadens Nova’s advanced packaging reach. Their multisensor dimensional metrology platform tackles wafer warpage and thickness issues across 150mm to 300mm wafers.
💰 $1B Revenue Target: Originally planning $800M organically plus $150–$200M from M&A, Nova now expects to hit $1B organically by 2027—citing “consistent market outperformance” and robust demand from AI and HPC segments.
📈 Record 2024 Results: 2024 revenue grew 30% year-over-year to $672.4M, net income rose 38%, and the company boosted its gross margin guidance up to 60% on the high end. CFO Guy Kizner noted, “We’re funding growth and maintaining best-in-class profitability.”
⚙️ Focus on Innovation: Management reaffirmed spending ~15% of revenue on R&D to fuel advanced logic, memory, and packaging solutions. Nova’s chemical metrology tools (Ancolyzer, DMR) also aim to reduce waste—aligning with chipmakers’ sustainability goals.
🌎 Diverse Customer Mix: Now 15% of sales come from advanced packaging alone. Leadership believes new nodes in logic, DRAM, and 3D NAND—plus expansions in automotive/IoT—will maintain stable growth despite cyclical volatility and geopolitical risks.
🚧 Cautious Watch: The team acknowledged potential macro headwinds, from export restrictions to general WFE swings. Still, Waisman underscored a “balanced portfolio” across geographies to mitigate risk.
Why AI/Semiconductor Investors Should Care: Nova’s move to expand into fast-growing segments like gate-all-around transistors, high-bandwidth memory, and 2.5/3D advanced packaging underpins their path to $1B in sales. Their emphasis on cutting-edge metrology—both dimensional and materials—makes them a vital partner for fabs racing to meet AI and HPC performance demands. This diversified approach, coupled with strong profitability, makes NVMI an intriguing bet on the future of semiconductors.
Semtech (SMTC)
🏭 Semtech Surges Ahead with Data Center & IoT Innovations
What The Chip: Semtech reported its Q4 FY2025 earnings on March 13, unveiling strong progress in data center growth, IoT momentum, and a significantly healthier balance sheet. Management highlighted improved margins, a broadening customer pipeline, and plans for accelerated R&D investments.
Details:
🔍 Debt Reduction & Margins: Net debt dropped by 68% year-over-year to $411M, trimming annual interest expenses by $40M. Adjusted gross margin reached 53.2%, up 430 basis points from last year. Mark Lin, CFO, said, “Debt paydown enables Semtech to focus investment on our core business growth engines.”
💡 LoRa on the Rise: (LoRa—which stands for “Long Range”—is a wireless technology developed by Semtech to power low-power, long-range communications across IoT devices.) LoRa-enabled revenue soared to $37.1M (up 28% sequentially). New LoRa Plus chips were introduced, expanding capability to Amazon Sidewalk, Wi-SUN, and Z-Wave. CEO Hong Hou noted, “LoRa’s sensitivity and extended battery life are real differentiators over competing protocols.”
🏭 Data Center Expansion: The data center segment hit $50M, up 16% sequentially. While CopperEdge deployments at one anchor customer face a “3-4 quarter” lull, Semtech remains “engaged with over 20 potential customers,” expecting broader adoption in FY2026. FiberEdge also reached record quarterly sales as 400G/800G ramp continues.
📶 IoT Systems Upside: IoT hardware bookings strengthened, boosted by a European competitor exiting the cellular IoT market and a China-based rival placed on the Section 1268 list. “We expect the pipeline to convert to bookings throughout the year,” said management.
📱 High-End Consumer Growth: Q4 revenue for consumer TVS and PerSe (person sensing) products climbed year-over-year. Semtech’s PerSe sensors target stringent SAR standards and gesture controls, with potential expansion into next-generation smart glasses.
⚙️ Portfolio Optimization Continues: While the balance sheet is now in better shape, management reiterated a focus on divestitures of noncore assets if the right opportunity arises.
📊 Q1 Outlook: Net sales guided at $250M ± $5M (up ~21% YoY at the midpoint), with adjusted gross margin near 53%. Adjusted earnings per share expected at $0.37 ± $0.03.
Why AI/Semiconductor Investors Should Care: Semtech’s success in data center connectivity, LoRa-driven IoT applications, and improved financial discipline underscores a compelling blend of innovation and capital strength. The potential for expanding AI workloads in data centers and the surge in industrial IoT give Semtech a promising path for continued growth. Investors should watch how quickly new design wins in CopperEdge and LoRa translate into sustained revenue traction.
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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] Nova Ltd. Investor Day: Advancing Metrology Leadership Through Innovation and Diversification
Executive Summary
*Reminder: We do not talk about valuations, just an analysis of the earnings/conferences
Nova Ltd. (“Nova”) recently hosted its Investor and Analyst Day, highlighting the company’s unwavering focus on advancing metrology and process control solutions for the semiconductor industry. In 2024, Nova posted record results, with revenue growing by 30% year-over-year to $672.4 million, while non-GAAP net income rose by 38% during the same period. Management underscored Nova’s core strengths—robust market outperformance, heavy R&D investment, and a culture that emphasizes both people-first values and technological innovation.
Nova’s President and CEO, Gabriel “Gabi” Waisman, shared updates on the company’s seamless executive transition over the past two years and reaffirmed a strategic road map that involves doubling 2022 annual revenue levels by 2027—organically reaching $1 billion in revenue. Originally, management had expected part of that goal to be fueled by acquisitions, but strong organic performance and new product introductions have now solidified the organic path to $1 billion. Beyond this core milestone, Nova envisions a potential additional boost from mergers and acquisitions.
Notable comments from executives underscored how growth is propelled by expanding into advanced logic, memory, and advanced packaging markets. Sharon Dayan, Chief Human Resources Officer, highlighted Nova’s strong retention rates—95% in 2024—and ongoing commitment to Environmental, Social, and Governance (ESG) goals. Zohar Gil, Chief Marketing Officer, provided an overview of global semiconductor trends—especially the rising demand for artificial intelligence (AI) chips. Meanwhile, Chief Technology Officer Shay Wolfling detailed Nova’s unique metrology solutions designed for next-generation semiconductor challenges, such as advanced packaging and 3D device architectures. Lastly, Chief Financial Officer Guy Kizner summarized Nova’s impressive profitability track record and its capital allocation framework, emphasizing disciplined investments in R&D, capacity expansion, and selective M&A.
Growth Opportunities
1. Expansion in Advanced Packaging
A key theme emerging from Nova’s Investor Day was the increasing importance of advanced packaging. Rising demand for heterogeneous integration, high-bandwidth memory (HBM), and 2.5D/3D architectures is driving growth opportunities in the broader semiconductor sector. Nova pointed to the proliferation of hybrid bonding and chiplet-based designs—which require ever more precise wafer-level, backside power-delivery, and interconnect measurements.
Executives emphasized that Nova’s acquisition of Sentronics early in 2025 strengthens the company’s product offering for advanced packaging. Sentronics specializes in dimensional metrology of wafer surfaces, thicknesses, and topographies, enabling Nova to address a larger share of the packaging market that goes beyond conventional 300 mm wafers. In 2024, approximately 15% of Nova’s revenue already came from advanced packaging, and management projects that share could grow further as artificial intelligence and other high-performance computing applications drive advanced packaging adoption.