Guodu Securities·2025-03-05 02:32Investment Rating - The industry investment rating is "Recommended" [3] Core Insights - The demand for computing power is expected to rise in the long term, with SMIC's performance exceeding expectations [3] - The release of the DeepSeek-R1 model by domestic AI companies is anticipated to accelerate AI application deployment, benefiting edge computing [3][4] - The semiconductor equipment sector is projected to grow rapidly due to domestic substitution and technological breakthroughs [4] - The consumer electronics sector is experiencing a recovery, driven by new AI-enabled products and government subsidies for consumer electronics [5] Summary by Sections AI Computing - Since the explosion of AI in 2023, domestic AI companies are entering a phase of large-scale deployment, with the DeepSeek-R1 model marking a significant advancement [4] - Key beneficiaries include foundries, GPUs, and ASIC chips, with recommendations for SMIC, Huahong, and others [4] Semiconductor - The semiconductor equipment sector is benefiting from accelerated domestic substitution, with a 10%+ year-on-year price increase in the electronic consumer sector since Q3 2024 [4] - Core companies in semiconductor equipment are seeing stable growth in new orders [4] Consumer Electronics - The Chinese government is supporting the replacement of old consumer electronics with subsidies, which is expected to stimulate demand [5] - The integration of AI into various consumer electronics is leading to a flourishing market with diverse new products [5] Company Performance - SMIC reported a record revenue of $2.207 billion for Q4 2024, with a gross margin of 22.6% [14] - The company expects a revenue growth of 6-8% for Q1 2025, with a gross margin forecast of 19%-21% [15]