Minsheng Securities·2025-11-03 08:58Investment Rating - The report maintains a "Recommendation" rating for the industry, indicating a positive outlook for investment opportunities in the sector [6]. Core Insights - The transition from Scale-out to Scale-up architecture in AI data centers is expected to drive significant growth in the interconnect technology market, particularly benefiting the switch chip market [3][4]. - Major technology companies are collaborating to establish new open standards like UALink to challenge Nvidia's dominance in AI data centers, which is anticipated to enhance interconnect capabilities [2][24]. - The domestic market for PCIe switch chips in China is projected to grow significantly, with estimates suggesting a market size of approximately 3.8 billion yuan in 2024, potentially reaching 17 billion yuan by 2029 [5][44]. Summary by Sections 1. Scale-up as an Upgrade Direction - Scale-up interconnect technology is becoming the preferred upgrade path for supernode solutions, addressing the limitations of traditional Scale-out architectures [1][15]. - The shift to Scale-up architecture aims to enhance performance by increasing the number of GPUs, CPUs, and storage resources within a single node, utilizing high-speed interconnect technologies like PCIe and NVLink [1][12]. 2. Growth of Switch Chip Market - The switch chip market is expected to benefit from the growth of Scale-up interconnect technology, with both PCIe switch chips and Ethernet switch chips poised for significant demand increases [3][26]. - The report highlights that the demand for AI large models will continue to drive the growth of Scale-up interconnects, positively impacting the switch chip market [3][26]. 3. Domestic Replacement Opportunities - The report identifies a substantial domestic replacement opportunity in the switch chip market, particularly for PCIe switch chips, as China is the largest market globally [5][44]. - The domestic PCIe switch chip market is expected to grow from 3.8 billion yuan in 2024 to 17 billion yuan by 2029, driven by the increasing demand for AI servers [5][44]. 4. Investment Recommendations - The report suggests focusing on companies with PCIe design capabilities, such as ZTE, Montage Technology, and others, as they are well-positioned to benefit from the growth in the switch chip market [5][54]. - Additionally, companies involved in Ethernet switch chip production, like ZTE and Sanken Communication, are also recommended for investment consideration [5][54].