NUA Strategy for Semiconductor Employees (NVIDIA, AMD, Broadcom, Texas Instruments)

The semiconductor sector produces the highest NUA appreciation ratios of any industry — and, for most employees, the most complicated state tax picture. AMD contributors from 2016 may face ratios exceeding 100:1 after the stock surged past $470 in 2026. NVIDIA employees who held NVDA inside their 401(k) see ratios of 10:1 to 40:1 depending on contribution era. Broadcom (AVGO) employees sit at 8:1 to 14:1 after the July 2024 ten-for-one split. Texas Instruments employees in no-income-tax Texas can profitably elect NUA even at the moderate 3:1 ratios a 2018 contribution produces at today's price. The complication: roughly 80% of U.S. semiconductor employees work in California, where long-term capital gains are taxed as ordinary income — sharply limiting the NUA benefit for moderate-income retirees while leaving high-bracket earners with massive federal savings to capture. Intel is the exception that runs in reverse: the stock has declined so sharply that most employees face zero appreciation. Here is the company-by-company analysis, the California math, and the RSU trap that sends most semiconductor workers in the wrong direction.

Why semiconductor 401(k) positions create extreme NUA ratios

NUA arbitrage is at its most powerful when the cost basis is extremely low relative to current market value — the wider the spread, the more ordinary income converts to long-term capital gains. Semiconductor stocks have, for much of the past decade, generated that spread faster than any other sector:

• AI-driven appreciation. The shift to AI-accelerated computing has sent GPU and chip-design stocks to multiples of their pre-2020 prices. AMD at $473 in August 2026 is more than 200× its 2016 trough. NVIDIA's appreciation over the same period is similar in magnitude.
• Long employee tenure. Major chip companies — TI, Qualcomm, Applied Materials, Intel — have large populations of 15-30 year employees who accumulated employer stock contributions over decades at prices that now look like rounding errors compared to current quotes.
• Stock split compounding. NVIDIA's back-to-back 4:1 (2021) and 10:1 (2024) splits mean an employee who contributed in 2018 at what appeared to be a $200/share price actually holds shares with a basis of $5.00 on a per-current-share basis — a 43:1 ratio at $215. See the stock splits section for the full calculation mechanics.
• BrokerageLink adoption. Many semiconductor companies offer Fidelity BrokerageLink (or equivalent self-directed windows) within their 401(k), allowing employees to direct some of their retirement savings into employer stock. Employees who did this in earlier years and did not rebalance now sit on positions with ratios that are hard to find elsewhere.

NVIDIA (NVDA): extraordinary appreciation and the BrokerageLink question

NVIDIA's stock has appreciated roughly 40× over the 2018–2026 period (split-adjusted), making any position accumulated during the pre-AI-era one of the richest NUA opportunities in any employer's 401(k). The challenge is confirming whether your 401(k) actually holds NVDA shares.

NVIDIA's 401(k) plan structure (administered by Fidelity NetBenefits): The employer match is dollar-for-dollar, paid in cash and invested in the employee's chosen fund allocations — not automatically in NVIDIA stock.¹ However, NVIDIA's plan includes a BrokerageLink self-directed brokerage account, which allows employees to direct retirement savings into individual stocks, including NVDA. Employees who used BrokerageLink to purchase NVDA shares — whether with employer-match dollars or salary-deferral dollars — can hold significant NVIDIA stock inside the plan.

Does BrokerageLink-purchased NVDA qualify for NUA? IRC §402(e)(4)(E) defines employer securities as securities of the employer corporation, without restriction on how those securities were acquired by the plan. NVDA shares purchased through BrokerageLink are held within the qualified plan and are employer securities of NVIDIA Corporation. In the opinion of most tax practitioners, they qualify for NUA treatment on lump-sum distribution. Confirm this interpretation with a tax advisor who has handled NVDA BrokerageLink positions before proceeding.

NVIDIA stock split history — both splits affect how you calculate your per-share basis:

• 4-for-1 stock split: July 20, 2021
• 10-for-1 stock split: June 10, 2024
• Cumulative split factor: 40× (one pre-2021 share = 40 post-2024 shares)

An NVIDIA employee who accumulated BrokerageLink contributions throughout 2018–2023 typically has a blended basis well below $30/share (post-all-splits), producing ratios that are among the highest of any employer in any sector. The primary constraint is the California location of most NVIDIA employees (Santa Clara, CA headquarters), which limits the state tax advantage — see the California section for when the NUA still wins and when it does not.

AMD: the most dramatic appreciation story — and where employees work

Advanced Micro Devices (AMD) has been through one of the most dramatic stock recoveries in semiconductor history, going from under $2/share in 2016 to $473 in August 2026 — an appreciation of more than 230× over ten years.² AMD has not had a stock split since 2000, so the per-share basis calculation is straightforward: what you paid per share is your basis per share.

AMD appreciation by contribution era:

Where AMD employees are located — this matters for state tax:

• Santa Clara, CA (HQ) — no California LTCG advantage. Federal benefit only.
• Austin, TX — AMD has a large engineering campus in Austin. Texas has no state income tax. Full federal NUA advantage.
• Bellevue, WA / Vancouver, WA — Washington state has a 7% capital gains tax on gains above $270,000/year (2026), but the first $270K of NUA gains each year are exempt. Partial advantage.
• Durham, NC / Milpitas, CA / Boxborough, MA — state income tax applies; rates vary.

An AMD engineer in Austin, Texas with contributions from 2018–2024 will have a blended basis somewhere in the $30–$60 range, producing ratios of 8:1 to 16:1 at today's prices. The same position held by a colleague in Santa Clara still yields large federal savings but pays California state tax at OI rates on the NUA appreciation. See Worked Example 1 for the Texas case and the California section for how state tax cuts into the benefit.

Broadcom (AVGO): strong ratios after the 10:1 split

Broadcom's 10-for-1 stock split on July 15, 2024 reset the per-share price from roughly $1,700 to $170. For the NUA analysis, the split does not change the total value of your position or your total basis — it simply divides both your share count and your per-share basis by ten. (See How Stock Splits Affect Your Basis for the full explanation.)

Broadcom's 10:1 split means all pre-split basis amounts must be divided by 10 to compare to the current post-split price of approximately $368 (August 2026):

Broadcom is headquartered in San Jose, California, and most employees are in the California Bay Area. A small number of employees work in Irvine, CA (legacy Broadcom) and Ft. Lauderdale, FL (legacy CA Technologies / Symantec operations) — the Florida employees capture the full federal NUA advantage with no state tax.

VMware acquisition employees (2023): Broadcom acquired VMware in November 2023. Former VMware employees who receive AVGO employer stock in their 401(k) may have ratios determined by the acquisition price exchange and subsequent AVGO appreciation. Verify with your plan administrator the per-share basis applied to any conversion-era AVGO lots.

Texas Instruments (TXN): moderate ratios, maximum state advantage

Texas Instruments is the standout for semiconductor NUA planning in one respect: the company is headquartered in Dallas, Texas, and the majority of its workforce is in Texas. Texas has no state income tax, which means employees capture the full federal LTCG advantage on NUA appreciation with zero erosion from state tax. At a sector where California dominates, TI's Texas residency is a structural NUA advantage.

TXN stock has appreciated steadily but not explosively compared to the AI-driven semiconductor names:

Texas Instruments acquired National Semiconductor in September 2011. Former National Semi employees whose 401(k) positions converted to TXN stock at the merger ratio carried over their National Semi basis into TXN shares under the tax-free reorganization rules. If you have pre-2011 National Semi basis in your TXN stock fund, your effective ratio at today's TXN price is even higher than the table above suggests — request a lot-level basis report to verify.

TI has historically offered a TXN Company Stock Fund in its 401(k) plan, allowing employer match contributions to be made in TXN shares. Long-tenure employees who have not rebalanced out of the stock fund can have substantial positions with low blended basis.

Qualcomm (QCOM): San Diego base and California complication

Qualcomm is headquartered in San Diego, California, with most employees in the California tax system. QCOM has appreciated from roughly $50–$60 in 2018 to approximately $161 in August 2026 — a 2.7:1 to 3.2:1 ratio for 2018 contributions.

At that ratio, the federal NUA savings are meaningful for high earners, but for moderate-income retirees in California, the math is tight. A Qualcomm employee who would face 22% federal OI on IRA distributions but only saves 7% (22% minus 15% LTCG) in federal tax while paying the same California OI rate either way should run a careful breakeven analysis before electing NUA. The more compelling case for Qualcomm employees is those with contributions from 2012–2016 when QCOM was in the $50–$70 range — ratios of 2.3:1 to 3.2:1 in California become meaningfully better for those in the 37% federal bracket.

Applied Materials, KLA, Lam Research: chip-equipment employers

The semiconductor equipment manufacturers employ large engineering workforces in Silicon Valley:

• Applied Materials (AMAT): Santa Clara, CA. Appreciated from roughly $30–$40 in 2018 to significantly higher current levels. 5:1–7:1 ratios for 2018 contributors. California-based means federal-only benefit.
• KLA Corporation: Milpitas, CA. Similar appreciation profile. California-based.
• Lam Research (LRCX): Fremont, CA. Strong appreciation over the past decade. California-based.

All three are California companies with similar NUA considerations: the federal savings are real (especially for high earners), but the California LTCG-as-OI tax eliminates the state-level advantage entirely. See the California section for the decision framework.

Intel (INTC): the cautionary tale — stock below peak, no NUA for most employees

Intel's stock peaked near $68/share in early 2020 and has since declined sharply. As of August 2026, Intel trades at approximately $20–$30. Employees who contributed from 2018 through 2021 — when INTC ranged from $45 to $68 — now hold positions with a paper loss relative to their cost basis. There is no net unrealized appreciation to elect.

Intel is the most important reminder in any semiconductor NUA discussion: dramatic stock appreciation is not a given. Employees should always verify whether their specific lots show a net gain before assuming an NUA election is available. If your employer stock position is worth less than your cost basis, NUA does not apply.

For Intel employees: the planning focus should shift to IRA optimization strategies (Roth conversions from a separate IRA, QCD for charitable giving, 0% LTCG bracket management for taxable account positions). The NUA door is closed until and unless INTC stock recovers above your blended basis.

How stock splits change your basis — and why the ratio is unchanged

A stock split is one of the most consistently misunderstood events in NUA planning. The core principle: a stock split does not change the value of your position or your total cost basis — it only changes the number of shares and the price per share.

After a split, your per-share basis is divided by the split factor. Your total basis (per-share basis × share count) remains identical. The NUA ratio — total FMV divided by total basis — is also unchanged by the split itself:

The practical implication: when a recordkeeper shows your per-share cost basis as $3.25 for NVDA shares, that is correct — it reflects an original purchase at ~$130 (pre-2021 split) divided by 40 (the cumulative 4×10 split factor). Do not assume the recordkeeper has made an error simply because the per-share basis looks impossibly low.

When verifying your basis with Fidelity NetBenefits (or your plan's recordkeeper), request both the per-share basis AND the total cost basis for each lot. The total-basis column is the authoritative figure for your NUA calculation.

The California complication: when NUA still wins, and when it doesn't

California taxes long-term capital gains as ordinary income — there is no preferential LTCG rate at the state level. This means the federal advantage of paying 15% or 20% on NUA appreciation instead of ordinary income rates applies only to the federal portion of your tax bill. California will tax the NUA gains at the same rate it would have taxed IRA distributions.

The net effect by federal bracket:

The key insight: California's treatment of LTCG as OI is symmetric — it neither helps nor hurts the NUA election at the state level. The entire NUA decision for California residents rests on the federal tax differential. For employees who expect 37% federal ordinary income on IRA distributions in retirement (because of pensions, RMDs, Social Security, and other income), the NUA election saves 13.2 cents per dollar of appreciation even in California. For employees who expect to be in the 12% bracket in retirement, the NUA election may actually cost more in total tax.

There is one additional California factor that hurts NUA at moderate incomes: the NUA appreciation, when sold, is classified as capital gain (even in California), which means it shows up in California's provisional income calculations differently than ordinary income for certain credits and deductions — always model the full picture, not just the marginal rate.

The RSU and ESPP trap: most semiconductor equity does NOT qualify

Semiconductor companies are heavy users of equity compensation: RSUs, stock options (NQSOs and ISOs), and Employee Stock Purchase Plans (ESPPs). The vast majority of the wealth that semiconductor employees build through equity compensation is not inside the 401(k) and does not qualify for the NUA election. This is the single most common misconception among semiconductor workers who inquire about NUA.

What does NOT qualify for NUA:

• RSUs: RSUs vest and settle in shares deposited directly to your brokerage account (usually E*TRADE, Fidelity, Morgan Stanley, or Schwab). These shares are in your taxable account from day one — they were never inside the 401(k) plan. NUA does not apply.
• ESPP shares: ESPP contributions come from after-tax payroll deductions and purchase shares at a discount, depositing them into a taxable brokerage account. Not inside the 401(k) plan. NUA does not apply.
• Stock options (NQSO / ISO): Options are exercised outside the plan. The resulting shares go into a brokerage account, not the 401(k). NUA does not apply.
• Shares purchased in a personal brokerage account: Even if you own thousands of NVDA shares in your personal Schwab account, those are not plan assets. NUA does not apply.

What DOES qualify:

• Employer stock held in a core plan fund (a "Company Stock Fund" or "Employer Stock Fund" within the 401(k))
• Employer stock purchased through a BrokerageLink, PCRA, or similar self-directed brokerage window within the 401(k) — where the shares are still held inside the plan, in a plan-trust account at Fidelity, Schwab, or similar
• Employer match contributions that were made in employer stock and remain in the plan's employer stock fund

The test: are the shares held in a retirement plan account (401(k) plan number visible, with employer tax ID)? If yes, NUA may apply. If the shares are in a regular brokerage account in your name, NUA does not apply regardless of what ticker they are.

Recordkeepers and plan mechanics

For in-kind stock distributions from any of these plans, the process is the same as described in the Fidelity NUA mechanics guide: call Fidelity's Workplace Investing line (not the retail line), use specific language requesting an in-kind transfer of employer stock to a taxable brokerage account, and confirm the same-calendar-year lump-sum distribution deadline with your plan's distribution processing team.

State tax table: major semiconductor hub states

Worked example 1: AMD engineer in Austin, Texas

Marcus is 57, a principal engineer at AMD's Austin campus with 14 years at the company. He was laid off in a restructuring — separation from service is a qualifying event under IRC §402(e)(4). He has not yet rolled his 401(k).

Position:

• 1,600 AMD shares in his 401(k). He participated in AMD's 401(k) from 2010–2024, accumulating employer-match contributions in AMD stock and directing additional deferrals to the AMD stock fund.
• Blended cost basis: $38/share (average across 14 years of contributions — AMD averaged $5–15 in 2012–2016 before the stock surged; later contributions at $100–$200 diluted the blended basis)
• Total basis: 1,600 × $38 = $60,800
• FMV at $473: 1,600 × $473 = $756,800
• NUA: $756,800 − $60,800 = $696,000
• Appreciation ratio: 12.4:1

Distribution year tax (separation at 57 — Rule of 55 exempts the 10% penalty):

• $60,800 cost basis distributed as ordinary income (only income this year — Marcus is married, wife earns no income)
• After $30,700 MFJ standard deduction: taxable income = $30,100 — fully in the 12% bracket⁴
• Federal income tax on basis: approximately $3,300
• Texas: no state income tax

Post-distribution NUA sales (over 5 years via tranche selling):

• Marcus sells $139,200 of AMD stock each year for 5 years
• His total income each year (NUA gain + modest consulting income) stays below $206,700 MFJ, keeping him in the 22% OI bracket, but his LTCG income lands in the 15% bracket (below $613,700 MFJ for LTCG)⁴
• NIIT of 3.8% does not apply: Marcus's combined MAGI stays below $250,000 MFJ each year
• Total LTCG tax: $696,000 × 15% = $104,400
• No Texas state income tax on gains

Total NUA path federal tax: ~$3,300 + $104,400 = $107,700

IRA rollover comparison: Marcus rolls $756,800 to an IRA. By age 73, with 16 years of growth at 7%, the account grows to approximately $2.2M. RMDs at 73 (÷ 26.5) generate about $83,000/year — on top of Social Security and any other income. Over a 20-year distribution horizon at a blended 24% federal effective rate (the 22–32% bracket range he would occupy with RMDs + Social Security): approximately $756,800 × 24% = $181,600 in present-value federal tax.

Federal savings from NUA election: approximately $73,900. With zero Texas state income tax, the full $73,900 flows through. Marcus also gains immediate flexibility: post-NUA stock can be sold at any time, donated to charity (for full FMV deduction and zero LTCG tax), or held until death for an estate step-up on post-distribution appreciation.

Worked example 2: Broadcom engineer in San Jose, California

Elena is 62, a senior engineering manager at Broadcom's San Jose headquarters, retiring after 9 years. Broadcom is her qualifying event (she reached age 59½, which is an alternative qualifying event under IRC §402(e)(4)(A)(iii)).

Position:

• 2,400 AVGO shares in her 401(k), all acquired during 2015–2024 via employer match and 401(k) Company Stock Fund contributions
• Blended cost basis: $32/share (post-split adjusted) — she contributed from 2015 when pre-split AVGO was $130–$200/share ($13–$20 post-split) through 2024 when post-split prices rose above $150
• Total basis: 2,400 × $32 = $76,800
• FMV at $368: 2,400 × $368 = $883,200
• NUA: $883,200 − $76,800 = $806,400
• Appreciation ratio: 11.5:1

Distribution year tax:

• $76,800 cost basis as ordinary income. Elena is married; she plans to retire fully this year.
• After $30,700 MFJ standard deduction: taxable income = $46,100 (12% bracket)
• Federal tax on basis: ~$5,300
• California: $76,800 × 9.3% CA state rate = ~$7,142 (roughly; California brackets are progressive)

Post-distribution NUA sales:

• Elena is a high earner — she has additional investment income, IRA distributions, and spousal income. Her MAGI in future years will exceed $250,000 MFJ.
• Federal: $806,400 × (20% LTCG + 3.8% NIIT) = $806,400 × 23.8% = $191,923
• California: $806,400 × 13.3% CA state rate = $107,251 (CA taxes LTCG as ordinary income)

Total NUA path (federal + California): ~$5,300 + $7,142 + $191,923 + $107,251 = $311,616

IRA rollover comparison (federal + California):

• $883,200 rolled to IRA; distributed in high-income years at 37% federal + 13.3% CA effective rates
• Federal: $883,200 × 37% = $326,784
• California: $883,200 × 13.3% = $117,466
• Total: $444,250

Total combined federal + California savings from NUA: approximately $132,600.

The California state tax is the same on both paths (13.3% rate on the appreciation, either as IRA OI or NUA LTCG), so the savings come entirely from the federal rate reduction: 37% OI to 23.8% effective LTCG+NIIT = 13.2 cents saved per dollar of NUA. On $806,400 of NUA, that is $106,445 in pure federal savings, plus the lower-bracket treatment of the $76,800 basis OI generates a further ~$26,000 in combined savings versus distributing the whole position as IRA OI.

For a comparable Broadcom employee in a lower retirement income bracket — say, someone who would distribute the IRA at 22% federal instead of 37% — the savings would be much smaller: 22% minus 15% LTCG = 7% federal savings, or about $56,400. Whether that justifies the complexity and timing constraints of the NUA election depends on the employee's full financial picture.

When NUA wins for semiconductor employees

• High appreciation ratios (5:1+) and a high federal bracket in retirement. If your IRA distributions would land in the 32–37% bracket, the federal savings from NUA are 8–13 cents per dollar — large enough to justify the election even in California.
• Texas and other no-income-tax state residents. AMD engineers in Austin, TI employees in Dallas, and others in Texas, Florida, Washington, or Nevada get the full federal LTCG advantage with no state erosion.
• Long-tenure employees with pre-AI-era basis. Contributions made when AMD, NVDA, or AVGO were at small fractions of current prices generate extraordinary ratios. Even modest positions can save $50,000–$150,000+ in federal tax.
• Estate planning hold-to-death strategy. If the stock is held until death, heirs receive a step-up in basis on any post-distribution appreciation (not on the NUA amount itself, which is IRD). For large, highly-appreciated positions, this can eliminate the LTCG entirely on future growth.
• Charitable giving of concentrated NUA stock. Donating AVGO, NVDA, or AMD shares directly to charity — or to a donor-advised fund — avoids all LTCG tax on the appreciated shares while generating a full FMV charitable deduction. This eliminates the NIIT concern entirely for the donated shares.

When NUA doesn't help

• Stock has declined from basis (Intel, some QCOM and AMD positions from peak years). If the stock is worth less than the plan's cost basis, NUA does not apply. Check your lot-level statement — do not assume appreciation exists.
• Low retirement income bracket in California. A California resident who would distribute IRA funds at 22% federal (after bracket optimization) will save only 7% federal on NUA appreciation, while paying the same 13.3% CA rate on both paths. The net savings may be too small to justify the complexity and lump-sum distribution requirement.
• Employer stock is not in the 401(k). The most common mistake: semiconductor employees who think their RSUs or ESPP shares qualify. They do not. Verify that your 401(k) statement shows employer stock before pursuing any NUA analysis.
• Plan does not allow in-kind distribution. Some plans require all distributions to be in cash (liquidating the stock). NUA requires in-kind transfer of shares. Confirm with your plan administrator before assuming in-kind is available.
• Near-term need for liquidity. NUA involves paying ordinary income tax on the basis today. Employees who need immediate access to the full proceeds of their 401(k) should weigh whether deferring the LTCG tax is worth upfront basis-distribution tax hit.

Questions to ask your plan administrator

1. "Does my 401(k) plan hold actual employer stock — either in a Company Stock Fund or through a BrokerageLink/PCRA account?" This is the threshold question. If the answer is no, NUA is not available regardless of how much your employer's stock has appreciated.
2. "Can you provide a lot-level cost basis report — every lot with acquisition date, number of shares, cost per share (pre-split AND post-split adjusted), and total basis?" The split-adjusted per-share basis is what you need for the NUA calculation.
3. "Does the plan document allow in-kind distribution of employer stock to an external taxable brokerage account?" This should be yes for most major plans, but verify in writing before beginning the distribution process.
4. "What is the processing deadline for an in-kind distribution if I want to complete the lump-sum distribution in this calendar year?" For year-end retirements, the internal deadline may be 4–6 weeks before December 31 — ask early.
5. [For NVIDIA BrokerageLink positions] "The employer stock I hold in my BrokerageLink account — is it classified as 'employer securities' in the plan documents, and does the plan allow NUA treatment on those shares under IRC §402(e)(4)?" Some plan documents are explicit; others require a confirmation from the plan sponsor's ERISA counsel.

Sources

1. NVIDIA 401(k) plan overview — NVIDIA Benefits (employer match and BrokerageLink feature)
2. AMD historical stock price data — Yahoo Finance (August 2026 price ~$473)
3. Arizona Department of Revenue — Individual income tax 2.5% flat rate (2026)
4. IRS Rev. Proc. 2025-32 — 2026 tax year inflation adjustments (LTCG brackets, OI brackets, standard deduction, NIIT thresholds)
5. Broadcom press release — 10-for-1 stock split effective July 15, 2024

Stock price data approximate as of August 2026. Basis and appreciation ratio ranges are illustrative — actual per-share basis depends on your specific lot acquisition history. Consult a fee-only tax advisor for your specific lot-level basis data and current-year tax projections. 2026 federal LTCG thresholds per IRS Rev. Proc. 2025-32 §3.03: 0% ≤$98,900 MFJ / ≤$49,450 single; 15% up to $613,700 MFJ; 20% above. NIIT 3.8% above $250,000 MAGI MFJ / $200,000 single (IRC §1411). Standard deduction 2026: $30,700 MFJ (IRS Rev. Proc. 2025-32). California LTCG treated as ordinary income (CA Rev. & Tax Code §§17041, 18031) — no state preferential LTCG rate. WA capital gains tax: 7% on gains above $270,000/year (WA SB 5096). Social Security Fairness Act (Jan 2025) repealed WEP and GPO — not referenced in this guide but relevant for employees with public-sector work history.