Dan Ives out with a new bullish note on the AI trade as he's been conducting his channel checks in Asia. He is the global head of technology research. He joins us from Hong Kong.Good morning to you, Dan. >> Great to be here. >> So what you found supports the bullish case for for AI.Is that what you've been finding. >> Yeah, I'd say overall in the region, look, demand to supply for Nvidia chips, it's about 10 to one. You know, potentially 12 to one.You know, look, we do these trips, you know, three, four tim ...

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Chinese Semiconductors, specifically focusing on AI-related Wafer Fab Equipment (WFE) and Outsourced Assembly and Test (OSAT) companies [1][3][17] Core Insights and Arguments - **Positive Outlook on AI Development**: The development of China's AI ecosystem is expected to drive sustained investment in 28nm and below logic and memory technologies, particularly in AI-related applications [1][3][17] - **Earnings and Revenue Forecasts**: - Earnings and price targets for covered WFE and OSAT companies have been raised for 2026-27, reflecting a revenue CAGR of 34% from 2025-27 [1][3][17] - Combined revenue for covered WFE companies is projected to reach US$11.7 billion by 2027, implying a 30% market share in China [17] - **Valuation Comparisons**: Current valuations for leading WFE and OSAT companies remain below historical averages, indicating potential for re-rating as AI technology advances [21][23] Notable Developments - **Huawei's AI Roadmap**: Huawei has publicly presented its AI accelerator roadmap through 2028, showcasing a series of AI chips and a super-cluster solution, marking a significant shift in its semiconductor capabilities [2][9][10] - **Investment in AI Accelerators**: Other Chinese companies, including T-head, Baidu, and MetaX, have also unveiled new AI accelerators, indicating a robust competitive landscape [2][10] - **Supply Chain Improvements**: The localization of AI accelerators is expected to ease supply constraints by 2026, benefiting domestic semiconductor manufacturers [2][10] Stock Picks and Recommendations - **Top Picks**: Recommended stocks in AI infrastructure include AMEC, NAURA, and JCET, with a preference for Horizon Robotics in edge AI [4] - **Price Target Adjustments**: - AMEC's price target raised from Rmb255.50 to Rmb351.50, reflecting a higher earnings forecast and improved valuation metrics [27] - NAURA's price target increased from Rmb470 to Rmb564, driven by a higher mid-term ROE forecast [35] - ACMR's price target raised from Rmb163.50 to Rmb222, based on improved earnings expectations [40] Additional Insights - **Geopolitical Risks**: The impact of geopolitical tensions, particularly related to export controls, is becoming more manageable, allowing for better domestic supply chain reliance [23] - **Long-term Growth Drivers**: Generative AI is expected to be a structural growth driver for Chinese semiconductor companies over the next decade, with significant room for localization and technological advancement [23][24] Financial Metrics and Changes - **Earnings Revisions**: - AMEC's earnings for 2025-27 have been adjusted upwards by 1% to 5% [26] - JCET's domestic revenue for 2026-27 has been raised by 7.6% to 10.6% due to stronger demand from AI-related chips [20][50] - **Valuation Metrics**: - Current PE ratios for AMEC and NAURA are significantly below their historical peaks, suggesting potential for future valuation expansion [21][24] This summary encapsulates the key points discussed in the conference call, highlighting the optimistic outlook for the Chinese semiconductor industry driven by advancements in AI technology and the associated financial implications for leading companies in the sector.

Core Points - Apple plans to increase investment in China despite cautious sentiment among U.S. companies regarding relations with the country [1][2] - The specific size of the projected investment was not disclosed during the meeting between Tim Cook and China's industry minister [2] - Apple has managed to remain relatively unaffected by the U.S.-China trade war, unlike other companies such as Nvidia and Qualcomm [3] Investment Strategy - Tim Cook previously announced a commitment to invest an additional $100 billion in U.S. manufacturing while also establishing a clean energy fund in China worth 720 million yuan ($101 million) [5] - Apple is attempting to diversify its manufacturing by shifting some capacity to India while maintaining strong ties with Chinese suppliers [6] Government Relations - U.S. companies are navigating a complex relationship with the U.S. government while trying to maintain a positive image in China [4] - China's industry minister expressed hope that Apple will continue to explore the Chinese market and collaborate with local suppliers [7]

Huawei’s key partners are showcasing a dizzying array of products from software to chip gear just days after Trump threatened more curbs on China’s access to advanced technologies https://t.co/Hnsp2GtOuF ...

Core Insights - The Chinese smartphone market showed a total shipment of 68.4 million units in Q3 2025, reflecting a year-on-year decline of 0.6%, indicating overall market stagnation [1]. Group 1: Market Performance - Vivo leads the market with a shipment of 11.8 million units, capturing 17.3% market share, despite a year-on-year decline of 7.8% [2][3]. - Apple follows closely with 10.8 million units shipped, achieving a market share of 15.8%, with a slight year-on-year increase of 0.6% [2][3]. - Huawei ranks third with 10.4 million units and a market share of 15.2%, showing a reduced decline of 1.0% year-on-year [2][3]. - Xiaomi's shipment stands at 10.0 million units, holding a 14.7% market share, with a year-on-year decrease of 1.7% [2][3]. - OPPO shipped 9.9 million units, securing a market share of 14.5%, with a minor year-on-year increase of 0.4% [2][3]. - Honor, with a shipment of 9.8 million units, holds a market share of 14.4%, experiencing a year-on-year decline of 2.1% [2][3]. - The "Others" category saw a significant increase in shipments to 5.6 million units, representing 8.2% market share, with a notable year-on-year growth of 21.5% [2][3]. Group 2: Industry Events - The 2025 Bay Area Semiconductor Industry Ecosystem Expo is scheduled from October 15 to October 17, 2025, at the Shenzhen Convention Center, featuring over 600 participating companies and an exhibition area of 60,000 m² [4].

Core Insights - Hyperscalers like Alphabet, Meta, Amazon, and Microsoft are investing heavily in Nvidia chips while simultaneously developing custom chips to reduce reliance on Nvidia [1] - Huawei has outlined a three-year plan to compete with Nvidia, indicating a shift in China's tech landscape and a potential threat to Nvidia's dominance [2] - Advanced Micro Devices (AMD) has partnered with OpenAI, signaling a diversification in sourcing for AI GPUs beyond Nvidia [3] - Despite attempts from various competitors, Nvidia currently maintains over 90% market share in AI GPU workloads [5] Nvidia's Competitive Strategy - Nvidia is innovating to maintain its market position, recently launching the Vera Rubin NVL144 CPX platform as a successor to its Blackwell GPU [6] - The company is making significant investments, including up to $100 billion in OpenAI and $2 billion in Elon Musk's xAI, which could ensure continued revenue streams as these companies purchase Nvidia chips [7] Market Valuation and Future Outlook - Cantor Fitzgerald analyst raised Nvidia's target price from $240 to $300, suggesting a potential market cap exceeding $7 trillion, reflecting investor confidence in Nvidia's growth [8] - Global investment in AI infrastructure is projected to reach $4 trillion over the next five years, indicating a robust market for AI GPUs [10] - The AI GPU market is expected to accommodate more players, but Nvidia remains bullish on its prospects despite concerns of a market bubble [11]

Core Insights - Nvidia has established itself as the leading player in the AI hardware market, but competition is emerging from companies like Intel and AMD, as well as domestic players in China like Alibaba [1][2][4] - Alibaba is positioning itself as a significant competitor in the AI hardware space, potentially becoming the "Nvidia of China" [4][17] - The Chinese AI market is projected to grow significantly, with estimates suggesting it could reach $1.4 trillion by 2030, presenting substantial investment opportunities [10][14] Company Overview - Alibaba's revenue is primarily driven by e-commerce, with over 50% of Q2 2025 sales from domestic operations and 15% from international e-commerce [5] - The cloud computing segment, which includes AI, accounts for 15% of total sales and has shown a year-over-year growth of 26%, indicating strong potential for future expansion [6] - Alibaba's T-Head processor has performance specifications comparable to Nvidia's H20 GPU, but at a cost approximately 40% lower, making it an attractive option for Chinese firms [7] Market Dynamics - The Chinese government is increasingly wary of reliance on foreign technology suppliers, prompting a push for domestic AI hardware development [3][4] - Alibaba's AI solutions are designed to be compatible with open-source software, potentially offering greater flexibility compared to Nvidia's CUDA ecosystem [8] - Demand for Alibaba's T-Head processors is already evident, with orders from state-owned telecom China Unicom for a new data center [13] Future Outlook - Analysts predict Alibaba's revenue will continue to grow through 2027, with the potential for accelerated growth in its AI segment [17] - Despite the challenges, Alibaba's stock is expected to remain a strong investment opportunity, even if it does not replicate Nvidia's extraordinary gains [15][16][18]

US-China Trade War & Tech Industry Impact - NASDAQ 下跌超过 15%，原因是美国总统在 Truth Social 上发帖称中国在稀土问题上变得充满敌意，而此前数小时，中国宣布对美国芯片巨头 Qualcomm 进行反垄断调查 [1] - Qualcomm 股价暴跌近 5%，原因是投资者消化了中美贸易战升级带来的附带损害 [2] - 中国正在对 Qualcomm 收购以色列公司 Auto Talks 的交易展开反垄断调查，该公司构建车辆通信技术，尽管该交易已于去年年底完成 [2] - 中国监管机构指责 Nvidia 2020 年收购 Melanox 的交易违反了反垄断法 [4] - 据英国《金融时报》报道，中国已禁止国内主要企业购买 Nvidia 的 AI 芯片 [4] - 美国总统威胁要取消与中国国家主席习近平本月的会晤，此前中国公布了对稀土矿物的出口限制，稀土矿物是国防系统和半导体的重要投入 [5] - 中国 AI 领导者，如阿里巴巴和百度，据报道在受到美国对 Nvidia 和 AMD 先进芯片的出口禁令数月后，加倍投资本土半导体 [5] - 美国芯片制造商正在成为两国之间更广泛贸易战中的谈判筹码 [13] Semiconductor Industry & Geopolitical Considerations - 关键问题是中国在半导体方面的自给自足程度，特别是在美国实施出口限制之后 [6][7] - 特朗普政府与供应商达成协议，允许在支付一定费用和分成收入后获得某些技术，之后北京方面禁止阿里巴巴等本地公司进口该技术，转而依赖华为的芯片 [7] - Nvidia 首席执行官黄仁勋一直积极游说，希望确保中国的技术基于美国架构 [9] - Nvidia 的商业模式在很大程度上依赖于在中国的销售，分析师正在试图预测如果无法进行这些出口，会对 Nvidia 产生什么影响 [11] - Nvidia 重新开放供应链的关键在于美国总统对此事的立场 [12]

Core Viewpoint - The ongoing trade tensions between the US and China are escalating, particularly affecting the semiconductor industry, with Qualcomm facing an antitrust investigation in China and potential repercussions for its business operations [2][5][11]. Company Impact - Qualcomm's stock has dropped nearly 5% following the announcement of an antitrust probe into its acquisition of Auto Talks, indicating investor concern over the implications of the trade war [2][11]. - The investigation suggests that Qualcomm may have violated anti-monopoly rules, which could jeopardize its business relationships with major Chinese brands like Xiaomi [3][5]. - Nvidia is also under pressure, having been accused of breaching antitrust laws in China, and facing restrictions on domestic firms purchasing its AI chips [4][5]. Industry Dynamics - The trade war is prompting China to accelerate its efforts to become self-sufficient in semiconductor technology, with local companies like Alibaba reportedly increasing their reliance on domestic chip production [5][7]. - The situation highlights the strategic importance of semiconductor technology in the broader context of US-China relations, with chipmakers becoming critical negotiating tools in the trade conflict [12][13]. - The potential for Nvidia to reopen its supply chain to China is seen as a key factor in its future performance, with upcoming earnings reports expected to reflect the impact of these trade tensions [11][12].

Core Insights - Nvidia's CEO Jensen Huang expressed concerns about the competitive threat from China in the AI chip market, noting that Chinese companies are rapidly advancing and could challenge Nvidia's dominance [1][2] - The shift towards domestic alternatives in China is gaining momentum, as companies like iFlytek are training large language models on Huawei's chips, indicating a significant move away from reliance on Nvidia [2] - Nvidia's stock has experienced volatility due to various challenges, including export restrictions and competition from Chinese firms, despite being the first company to surpass a $4 trillion market value [3][5] Nvidia's Market Position - Nvidia is currently the world's most valuable company and leads in AI training GPUs, but faces increasing competition from Chinese companies pivoting to homegrown hardware [3] - The company reported zero sales from its H2O chip in China for the fiscal second quarter, and management did not include H20 sales in its third-quarter revenue outlook of $54 billion [4] Regulatory and Competitive Landscape - U.S. export restrictions have impacted Nvidia's ability to sell advanced chips in China, and Chinese regulators have cautioned local firms against purchasing Nvidia's products [8][10] - Chinese regulators are actively assessing local chipmakers' capabilities, with reports suggesting that domestic AI chips are now performing at levels comparable to Nvidia's offerings [13] Key Competitors in China - Huawei is identified as a major competitor, producing its own Ascend AI chips, but faces challenges in scaling production due to restrictions on advanced chipmaking tools [15][16] - Alibaba is developing new chips compatible with Nvidia's platform and is significantly increasing its AI infrastructure budget, indicating a strong push to compete in the AI space [19][20] - Other notable competitors include MetaX, which is preparing to mass-produce a chip to replace Nvidia's H20, and Cambricon, which has seen a surge in revenue due to demand for its AI processors [23][27] Future Outlook - Analysts suggest that while China's chipmakers may eventually close the gap with Nvidia, it is not expected to happen in the near term, as the country aims for AI sovereignty and increased domestic production [33][34]