Alpha and Omega Semiconductor (AOS) Secures Its First Nvidia AI Server Order, Emerging as the Leading and Primary Beneficiary of GB300 NVL72; Poised to Exit Losses by 2Q25/FY25Q4

Key Takeaways:

1. Nvidia accelerates GB300 NVL72 development and plans to pull in DrMOS/SPS orders earlier, with a 
   total of 2025 purchases expected to surpass 150M units.
    
2. AOS confirmed as the primary DrMOS supplier for GB300 NVL72 (70% market share). AOS is 
   expected to ship 50–60M DrMOS units in 2Q25 (vs. market consensus of mass shipments starting in 4Q25).
    
3. AOS enters the Nvidia AI server supply chain with GB300 NVL72. AOS's investment sentiment and 
   performance are unaffected by the earlier transition from GB200 to GB300. AOS is likely to exit its 
   losses as early as 2Q25/FY25Q4.

Latest Industry Surveys and Updates:

1. GB300 NVL72 adopts graphics card-grade 5x5 DrMOS (a.k.a. SPS) to reduce costs. Key differences from GB200 NVL72 include lower current specifications, over-current limit (OCL) removal, and lower costs.
    
2. These changes result in ~30% increased DrMOS usage per GB300 NVL72 rack, but with ~50% lower ASP, leading to an overall DrMOS cost reduction of 35-40%.
    
3. Recent Nvidia validation confirms AOS as the primary DrMOS supplier with 70% market share (MPS as 2nd supplier). To ensure smooth delivery amid robust demand for AOS's production capacity, Nvidia placed orders early, with AOS expected to ship 50-60M units for 2Q25.
    
4. The controller fully manages GB300 NVL72's OCL. MPS will ship controllers that work with AOS DrMOS, with expected shipments of ~1.2M units in 2Q25. Due to specification upgrades, GB300 NVL72 
   requires ~60% more controllers per rack compared to GB200 NVL72.
    
5. These findings indicate Nvidia's accelerated GB300 system development, primarily responding to 
   CSP demand.

Analysis & Conclusions:

1. Thanks to Nvidia's early DrMOS orders, AOS's 2025 revenue is expected to grow 10% YoY (vs. market consensus of 2-4%). The company could break even as early as 2Q25, with further profit 
   improvements in 2H25 - beating market expectations of continued losses through 2Q-3Q25.
    
2. AOS's future growth drivers include: increased GB200 NVL72 shipments in 2026, new lower-end 
   GB300 models and HGX/DGX B300 deliveries, and rising significantly Rubin DrMOS demand.
    
3. As the controller supplier for Nvidia's RTX 50 series GPUs, AOS is well-positioned to get GB300 
   NVL72 controller orders.
    
4. Recent stock price corrections for Nvidia and its supply chain, triggered by DeepSeek, also reflect 
   concerns that GB200 NVL72 shipments may be falling short of expectations. As Nvidia accelerates 
   the transition from GB200 to GB300, new winners and losers will emerge. Existing GB200 suppliers 
   are not necessarily at a disadvantage, but new suppliers entering with GB300—such as AOS—are 
   likely to garner heightened market attention.
    
5. Note that in the near term, AOS's shipments will not reflect GB300 NVL72 rack deliveries. AOS will 
   start shipping in 2Q25 primarily because Nvidia placed early orders to ensure smooth supply.

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