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The artificial intelligence sector is continuing its sharp surge despite fears of a potential 'bubble', and Nvidia is leading the space with over $4.5 trillion market cap. But, heading into 2026, one ... ...

Market Overview - The main board saw significant gains with stocks like Dahua Intelligent (+10.03%), Junya Technology (+10.03%), and Huamai Technology (+10.02%) leading the rise [1] - The ChiNext board also performed well, with Zhishang Technology (+20.00%), Dongtian Micro (+20.00%), and Rongke Technology (+20.00%) showing strong increases [1] - The Sci-Tech Innovation board was led by Ruikeda (+20.00%), Saiwei Microelectronics (+18.82%), and Changguang Huaxin (+15.26%) [1] - Active sub-industries included SW Communication Network Equipment and Devices (+6.84%) and SW Other Electronics III (+4.77%) [1] Domestic News - New Sound Semiconductor Co., Ltd. completed a C-round financing of 269 million yuan, planning to invest over 150 million yuan in capacity expansion at its Jiaxing production base, aiming to increase BAW filter annual production capacity to 1 billion units [1] - Hengxuan Technology reported smooth progress in the development of its next-generation low-power high-performance wearable chip, the BES6000 series, expected to enter the sample delivery stage in the first half of next year [1] - Visionox announced at Tsinghua University's forum that its fourth-generation pTSF technology has achieved mass production, marking a significant advancement in OLED key materials in China [1] - China's integrated circuit exports reached 1.29 trillion yuan in the first 11 months of this year, a year-on-year increase of 25.6%, significantly outpacing the overall export growth rate [1] Company Announcements - Jieshun Technology announced it won the operation project for the underground parking lot of Zhengzhou Longhu Financial Center, expecting operational revenue exceeding 70 million yuan over a six-year contract period [2] - GoerTek reported progress in the equity transaction of GoerTek Optical Technology Co., Ltd., with all preconditions for the share exchange transaction being met by December 9, 2025 [2] - Naxin Micro announced its first share buyback through centralized bidding, repurchasing 344,547 shares, accounting for 0.21% of the total share capital, with a total buyback amount of 53.74 million yuan [2] - Chuangyi Huikang reported the completion of the transfer of 117,698,823 shares held by Philips Investment, representing 7.60% of the total share capital [2] International News - LaserApps successfully fabricated a 30μm TGV on semiconductor glass substrates, achieving high aspect ratios [2] - Samsung Electronics received an order from AI chip startup Tsavorite, with an order value exceeding 100 million USD for AI chip foundry services using its 4nm process technology [2] - U.S. Senate members proposed legislation to formalize current export controls on advanced semiconductors, potentially affecting companies like NVIDIA and AMD [2] - Dell is considering a price increase of at least 15%-20% for PC and server products due to rising memory prices, with other manufacturers like HP also warning of potential price hikes [2]

Core Viewpoint - The recent bipartisan proposal in the U.S. Congress aims to prohibit the export of advanced AI chips to countries like China and Russia, reinforcing the ongoing trend of tightening technology controls against China [1][3]. Group 1: Legislative Actions - A bipartisan bill led by Republican Senator Peter and Democratic Senator Chris requires the U.S. Department of Commerce to ban exports of AI chips that exceed current licensing standards to China and Russia within the next 30 months [1]. - This legislative move is seen as a counterbalance to potential policy relaxations by the Trump administration regarding technology exports to China [3]. - The proposal reflects a continuation of the alternating tightening and loosening of U.S. chip control policies, which can be traced back to early 2025 when Nvidia's H20 chip was added to the control list [3]. Group 2: Impact on U.S. Companies - Companies like Nvidia and AMD, which had received partial export licenses for certain chips, will find their next-generation products, such as the H200, completely barred from export to China [3]. - The U.S. government's tightening of AI chip exports has led to significant losses for American chip manufacturers, as they can no longer sell high-end GPUs to China, resulting in a substantial loss of orders [4]. Group 3: China's Response - Despite the U.S. tightening its grip on AI chip exports, China's AI development has not stalled; instead, it has accelerated due to a shift towards domestic chip production and self-reliance [3][4]. - Reports indicate that the demand for AI chips in China is increasingly being met by domestic manufacturers, with the market share of local AI chips expected to rise to approximately 40% by 2026 [4].

Core Viewpoint - The article discusses the recent bipartisan legislative proposal in the U.S. to impose stricter export controls on advanced AI chips to China and other countries, highlighting the implications for both U.S. and Chinese semiconductor industries [2][4]. Group 1: Legislative Actions - A bipartisan bill led by U.S. Senators Peter and Chris aims to prohibit the export of advanced AI chips to China and Russia for the next 30 months [2]. - This legislation serves as a counterbalance to potential policy relaxations by the Trump administration regarding technology exports to China [4]. - The proposal reflects a continuation of the U.S. policy of alternating between tightening and loosening restrictions on semiconductor exports to China, dating back to early 2025 [4]. Group 2: Impact on U.S. Companies - Companies like NVIDIA and AMD, which previously received export licenses for certain chips, will now face restrictions on their next-generation products, such as the H200 AI chip [4]. - The inability to sell high-end GPUs to China has resulted in significant order losses for U.S. chip manufacturers, indicating a failure of the export control strategy [5]. Group 3: China's Semiconductor Industry - Despite the tightening of U.S. export controls, China's AI development continues to thrive, driven by domestic innovation and a shift towards local chip alternatives [4][5]. - The market share of domestic AI chips in China is projected to rise to approximately 40% by 2026, as local manufacturers accelerate their research and development efforts [5].

Core Viewpoint - AMD CEO Lisa Su believes that the AI industry is not in a "bubble" and that concerns about such a bubble are exaggerated, emphasizing the need for massive chips from companies like AMD to support future AI developments [3]. Group 1: Company Performance - Since Lisa Su became CEO in 2014, AMD's market value has increased from $2 billion to $300 billion [3]. - AMD has successfully launched the Zen architecture processors, replacing the less favorable Bulldozer architecture [3]. Group 2: Strategic Partnerships - AMD entered a significant partnership with OpenAI earlier this year, where OpenAI will deploy 6 GW of AMD Instinct GPUs [3]. - As part of the agreement, AMD allowed OpenAI to purchase 160 million shares of AMD stock at $0.01 per share, equating to approximately 10% of the company's shares [3]. Group 3: Competitive Landscape - Lisa Su does not express concern over competition from NVIDIA or tech giants like Google and Amazon, who are developing their own chips [3]. - The primary focus for AMD is on accelerating innovation rather than worrying about competitors [3]. Group 4: Future Outlook - Lisa Su describes the current state of AI as being in its "infancy," indicating that AMD must prepare for the future by developing more chips [3].

Investment Rating - The report does not explicitly state an overall investment rating for the semiconductor industry or specific companies within it Core Insights - The semiconductor industry is experiencing a significant AI super cycle, with companies like AMD expecting substantial growth in AI workloads and custom ASICs capturing 20-25% of the total addressable market [2][15] - KLAC anticipates growth in its TSMC business and higher investment from INTC, indicating a positive outlook for memory and advanced packaging sectors [3][16] - CoreWeave reports an "insatiable" demand for compute resources, highlighting the shift in AI workloads from training to more compute-intensive inferencing [17] - ARM is making strides in data center CPU development, with expectations of increased revenue opportunities through its CSS model [5][18] - MCHP has raised guidance due to strong order flow and backlog, indicating robust demand across multiple sectors [6][19] - INTC is cautious about supply constraints peaking in 1Q26, while also seeing increased demand driven by AI applications [9][20] Summary by Company AMD - AMD is in a ten-year AI super cycle, expecting significant capital deployment from large companies [2] - The company anticipates multiple GW-scale customers beyond OpenAI, indicating strong market confidence [15] KLAC - KLAC expects low to mid-single-digit growth in C1H:26 due to memory pull-ins and reassured investors about N2 monetization continuing into C2026 [3][16] CoreWeave - CoreWeave's backlog is approximately 55 billion, indicating a strong demand for AI compute resources [17] ARM - ARM is progressing on a data center CPU chip for a major customer and sees significant revenue potential through its CSS model [5][18] MCHP - MCHP reported phenomenal orders in November and expects CQ1 to be significantly above normal seasonal levels [6][19] INTC - INTC reiterated that supply constraints are expected to peak in 1Q26, with a focus on AI-driven demand for CPUs [9][20] PI - PI sees growth from deeper apparel adoption and logistics deployments, with a focus on improving gross margins [10][21] AMBQ - AMBQ's customer base is stable, with expectations for diversified growth in 2027 [11][22] ENTG - ENTG is focused on improving gross margins and may consider consolidating capacity to enhance sentiment [12] SMTC - SMTC is optimistic about its CopperEdge ramp and the adoption of LPO technology among hyperscalers [13][23] Anthropic - Anthropic is constrained by compute capacity, indicating strong demand for AI resources [14] Impinj - Impinj is focused on expanding its RAIN market presence, with significant growth opportunities in logistics and food sectors [21] Semtech - Semtech is preparing for a ramp in its ACC technology to support major hyperscaler deployments [23]

Industry Overview - The U.S. government is shifting focus from artificial intelligence (AI) to robotics, with discussions led by Commerce Secretary Howard Lutnick and major robotics founders [1] - Various agencies, including the Department of Transportation, are forming working groups and drafting policies to accelerate robotics development, responding to competition from China [2] Company Spotlight: Advanced Micro Devices (AMD) - AMD is positioned as a key player in the robotics sector, providing chips that are essential for next-generation robots and AI applications [3] - The company has a market capitalization of $351.6 billion and has been influential in high-performance computing since its founding in 1969 [4] Stock Performance - AMD's stock has surged nearly 81% year-to-date, significantly outperforming the Semiconductor Ishares ETF, which rose 44.3% [5] - The stock reached a peak of $267.08 in October before experiencing a correction of about 18%, but it has still shown an impressive 89% increase over the past six months [5] Technical Analysis - Current technical indicators suggest that AMD's stock is in a cooling phase, with the 14-day RSI slightly above 47, indicating a neutral momentum [6] - The MACD shows a softening trend, with the MACD line falling below the signal line, suggesting a decrease in short-term momentum while the overall uptrend remains intact [6]

Investment Rating - The industry investment rating is "Positive" [2] Core Insights - The NAND Flash wafer contract prices have significantly increased, driven by strong demand from AI applications and enterprise-level SSD orders. The average monthly price increase for various products reached 20%-60% in November [2][3] - Micron Technology announced plans to gradually shut down its Crucial consumer storage business by the end of February 2026, reallocating capacity and investment towards enterprise-level DRAM and SSD products to meet the growing demand in the AI sector [2][3] - ByteDance has launched the Doubao mobile assistant, marking a significant step towards the realization of AI-integrated smartphones. This assistant can perform tasks across various scenarios, potentially leading to a new wave of AI smartphone releases from other manufacturers [2][3] Market Performance Summary - The performance of the electronic sub-sectors has varied, with the following year-to-date changes: Semiconductors (+40.98%), Other Electronics II (+42.02%), Components (+88.55%), Optical Electronics (+10.22%), Consumer Electronics (+44.83%), and Electronic Chemicals II (+38.67%). Weekly changes include: Semiconductors (+0.88%), Other Electronics II (-1.34%), Components (-0.67%), Optical Electronics (+4.42%), Consumer Electronics (+1.61%), and Electronic Chemicals II (+0.34%) [2][9] - In North America, key stocks showed mixed performance, with notable changes including Tesla (+5.77%), Qualcomm (+4.00%), and Micron Technology (+0.31%) [2][10] Recommendations - Suggested companies to watch include: For overseas AI - Industrial Fulian, Huadian Co., Pengding Holdings, Shenghong Technology, and Shengyi Technology; For domestic AI - Cambricon, Chipone, Haiguang Information, SMIC, and Shenzhen South Circuit; For storage - Demingli, Jiangbolong, Zhaoyi Innovation, Jucheng Co., and Purun Co.; For SoC - Rockchip, Lexin Technology, Hengxuan Technology, Amlogic, and Zhongke Lanyun [3]

Core Viewpoint - The competition between Nvidia and AMD in the AI infrastructure market is intensifying, with AMD showing strong performance in 2025 and potential for further growth in 2026 [1][3]. Nvidia's Position - Nvidia holds over 90% market share in the data center GPU space, benefiting from its established CUDA software platform, which is crucial for training large language models [3][5]. - Nvidia's stock is trading at a forward P/E of 24, lower than AMD's 34, and it has experienced faster revenue growth, with a 62% increase last quarter compared to AMD's 36% [5]. - The company has a market capitalization of $4,433 billion and a gross margin of 70.05% [4]. AMD's Potential - AMD's data center revenue is significantly lower than Nvidia's, but capturing market share in the AI infrastructure space could lead to substantial growth [6]. - AMD has established a niche in the inference market, where it can compete more effectively against Nvidia, as the inference market is expected to grow larger than the training market [7]. - AMD has partnered with OpenAI, which includes a potential 10% stake in AMD and a supply agreement for up to six gigawatts of GPUs, valued at over $200 billion [9][10]. - AMD aims for over 35% compound annual revenue growth over the next three to five years, with more than 60% growth in data center revenue and an 80% increase in AI revenue [11]. Conclusion - Both Nvidia and AMD are expected to perform well in 2026, but AMD may have the edge due to its partnerships and growth potential in the AI market [13].