The ASIC Wars: How Having Less Than Half of Broadcom’s Margins Became Alchip’s Edge

Liang-rong Chen

Hello everyone,

Nvidia has just released its fiscal Q2 results, with Q3 revenue guidance set at $54 billion ±2%, representing a 54% year-over-year increase. Gross margin and other key metrics largely met market expectations.

Still, shares slipped as much as 3% in after-hours trading before narrowing losses to just 0.1%.

Former Barclays analyst Andrew Lu (陸行之) noted on Facebook that the more worrying signal lies in Nvidia’s ballooning inventory. The company’s days of inventory rose 32% quarter-on-quarter to 3.48 months, the highest level in five quarters.

He suspects the surge may reflect declining demand for Nvidia’s H100/H200 GPUs, as hyperscalers like Google, Amazon, and Meta ramp up deployments of their in-house AI ASICs.

That brought to mind Jensen Huang’s lightning visit to Taiwan last week, where he gave a talk at TSMC. According to an insider, Huang shared several of Nvidia’s “winning secrets.” One of the most important, he said, is what he calls “Speed of Light Scheduling.”

The man…