Investment Rating - The report assigns a "Buy" rating to companies such as JCET, Will Semi, and NAURA, while it recommends a "Sell" rating for companies like Sanan and Silan [4]. Core Insights - The report highlights three main implications of DeepSeek on China's tech supply chain, including the potential for better utilization of locally produced high-performance computing (HPC) chips, driving innovation in edge generative AI, and improving market sentiment leading to a re-rating of Chinese semiconductor stocks [1][10]. - The report emphasizes that the rapid development of generative AI will accelerate innovation in edge applications, stimulating demand for smarter devices and faster replacement cycles [20]. - The report notes that the Chinese semiconductor index (CITIC) rose by 17% in 2024, partly due to improved liquidity and government support, and suggests that DeepSeek may reshape investor perceptions of the Chinese tech supply chain [28]. Summary by Sections Section 1: DeepSeek's Impact on AI Supply Chain - DeepSeek is expected to enhance the utilization of local HPC chips and create a more sustainable business model for the local HPC supply chain [10]. - The strong demand for DeepSeek has led to its deployment on various local GPUs, which may benefit the domestic semiconductor supply chain [2][12]. Section 2: Edge AI Innovation - The report anticipates that edge AI will gain mainstream penetration from 2025 to 2027, driven by the popularity of DeepSeek [3][20]. - Major Chinese OEMs are rapidly integrating DeepSeek into their products, which is expected to have a significant positive impact on the entire tech supply chain [25]. Section 3: Stock Selection and Ratings - The report identifies preferred stocks such as JCET, Will Semi, and NAURA, while recommending a sell for Sanan and Silan [4]. - The report provides a detailed overview of various semiconductor companies, including their market caps, current prices, and target prices [7]. Section 4: Market Performance and Investor Sentiment - The report indicates that the Chinese semiconductor index has underperformed compared to the SOX index since 2023, suggesting a potential for re-rating as investor sentiment improves [28][29]. - The report includes performance comparisons of the Chinese semiconductor index against other indices, highlighting a significant recovery in 2024 [29].
瑞银：DeepSeek和中国人工智能进步的初步含义