Cambricon(SH:688256) First Shanghai Securities·2025-08-04 07:50Investment Rating - The report maintains a strong positive outlook on the AI application-driven demand for computing power, indicating a sustained high growth trajectory in the industry [2]. Core Insights - The computing power industry is at a pivotal moment with both domestic and international chains resonating, leading to renewed market interest in the domestic computing power supply chain after a period of stagnation [2]. - The report anticipates that the tight balance in domestic computing power will persist, with critical bottlenecks in advanced process capacity, advanced packaging capacity, large model adaptation, and HBM supply gradually being addressed over time [2]. - The second half of the year and into next year is expected to present significant investment opportunities in domestic computing power [2]. Domestic and International Computing Power Supply Chain Opportunities - The report suggests focusing on high-end PCB, optical modules, and server ODM sectors within the overseas computing power supply chain, which are expected to maintain high demand and profitability [3]. - Supply shortages in upstream materials such as fiberglass cloth and M8 CCL for AI servers are projected to continue, leading to potential price and profit margin increases [3]. - Investment opportunities are highlighted in companies like Shengyi Technology (生益科技, 600183) [3]. CoWoP Solution - NVIDIA is exploring the CoWoP packaging solution as a potential alternative to the current CoWoS packaging, which could enhance the value of PCBs if adopted [4]. - The CoWoP solution requires mSAP processes, which depend on ultra-thin peelable copper foil, currently dominated by Mitsui Mining & Smelting in Japan [4]. - Domestic company Fangbang Technology (方邦股份, 688020) is mentioned as having relevant products, although supply confirmation is pending [4]. Domestic Computing Power Supply Chain - Key domestic computing hardware companies such as Cambricon (寒武纪, 688256) and SMIC (中芯国际, 0981.HK) are recommended for investment [5]. - The report notes that due to geopolitical considerations, ByteDance has paused its ASIC chip design project with Broadcom and is now working with domestic design service providers [5]. - Investment opportunities are also suggested in domestic chip IP leader Xinyuan Technology (芯原股份, 688521) [5]. Traditional Analog Chip Recovery Opportunities - The analog chip sector is benefiting from domestic substitution and local-for-local demand, with wafer fab utilization rates remaining high and terminal prices increasing by 10-20% [8]. - TI has announced price increases for 99.9% of its product lines, with significant portions seeing price hikes of over 30% [8]. - Investment opportunities are recommended in companies like Huahong Semiconductor (华虹半导体, 1347.HK) and others [8]. Investment Recommendations - The report recommends buying shares in Huahong Semiconductor (1347.HK) and other companies involved in storage and mature process chips [9].