Core Viewpoint - The military electronics sector is experiencing a clear order recovery, with an acceleration in domestic and military trade directions due to the impact of "reciprocal tariffs" [1][7]. Group 1: Domestic Control in Military Applications - The demand for domestically controlled components in military applications is a hard requirement, with significant room for domestic production of chips and sensors in the internal assembly and military trade sectors [2]. - The importance of domestically produced military chips is increasing due to potential embargo risks and security threats posed by foreign components [2]. - The economic viability of imported chips has diminished following multiple rounds of tariffs, making domestic alternatives more attractive [2]. Group 2: Military Demand and Order Recovery - Military electronics demand is currently in a clear recovery phase, with most companies reporting significant order improvements for Q1 2025 [3]. - Companies like AVIC Optoelectronics and Aerospace Jiangnan Group have reported strong growth in defense-related orders, indicating a robust recovery trend [3]. - The order recovery is expected to be sustainable, with a positive outlook for Q2 2025 and the entire year [3]. Group 3: Civilian Expansion Opportunities - The automotive and industrial sectors are primary areas for military electronics companies to expand into, benefiting from the favorable impact of tariffs [4][5]. - The willingness of customers in these sectors to adopt domestic alternatives is improving, particularly for analog chips and sensors [4]. - The "reciprocal tariffs" policy is expected to facilitate faster growth in civilian applications for military electronics companies [5]. Group 4: Investment Strategy - Key areas of focus for investment include the ammunition supply chain and new material directions, with a strong emphasis on mixed-label targets that show higher recovery certainty and potential for exceeding expectations [7]. - Specific components of interest include digital chips, analog chips, sensors, connectors, modules/components, and passive components [7].