Summary of ARM's Conference Call Company Overview - **Company**: ARM Technology - **Industry**: Semiconductor and AI technology Key Points and Arguments AI and Chip Development - ARM is collaborating with Meta to optimize AI algorithms for ARM chips, with plans to potentially launch its own silicon-based chips by 2026, currently in decision-making phase [2][5][11] - Demand for AI and edge device chips is significantly unmet, contrasting with the internet bubble 25 years ago; current data center GPU and accelerator utilization is at 100% [2][6] - The development of edge AI is expected to accelerate, with more algorithms migrating from data centers to edge devices, leading to higher TOPS (trillions of operations per second) capabilities [2][9] Financial Performance - In Q3 2025, ARM's revenue reached $1 billion, a 34% year-over-year increase, with licensing revenue growing by 56% [3] - The growth was driven by enhanced design services for SoftBank and high-value licensing agreements with major companies, including a Chinese firm [3] - ARM raised its annual guidance by $100 million, while keeping EPS unchanged due to increased R&D investments in AI [3] Market Trends and Strategies - The trend in chip design is moving towards breaking down large complex chips into multiple chiplets, which can be packaged into super chips [4][12] - ARM plans to sell different functional chiplets to customers for custom assembly, avoiding direct competition and helping clients reduce time to market [13] - ARM does not foresee significant revenue decline in China due to geopolitical factors, as ARM China aims for technology localization, with a recent 20% year-over-year growth in licensing revenue [10] Collaboration and Future Outlook - ARM's partnership with OpenAI involves a $3 billion annual investment to access technology and insights crucial for developing next-generation CPUs [11] - The company is exploring the need for a complete semiconductor solution, which could enhance revenue but may lower profit margins [14][15] - ARM is focused on ensuring that future AI algorithms can run on ARM architecture, which is a core strategic direction for the coming years [20] Competitive Landscape - ARM believes that the collaboration between Intel and NVIDIA will not significantly impact its market share, as ARM chips offer lower power consumption and cost-effectiveness compared to x86 chips [19] - ARM's position in the Windows PC market is currently limited, but there are expectations for more companies to enter this space in the near future [20] Emerging Technologies - New chiplet technology has potential in the Chinese market, with TSMC leading the process, while challenges remain in energy-sensitive products like smartphones [16] - ARM is committed to addressing the technical challenges of cross-application data access for AI functionalities in edge devices [9] Conclusion - ARM is strategically positioned to capitalize on the growing demand for AI and edge computing, with strong partnerships and a focus on innovative chip design and technology localization in key markets.

Summary of Key Points Core Viewpoint The report discusses the completion and changes of certain fundraising projects by Broadcom Integrated Circuit (Shanghai) Co., Ltd., including the allocation of surplus funds to new projects, specifically focusing on the development of edge AI processor products and solutions. Group 1: Fundraising Overview - In 2019, the company raised approximately RMB 646 million through an initial public offering, with a net amount of about RMB 603 million allocated for specific projects [1] - As of June 20, 2025, the company has invested RMB 53.26 million in the "Standard Protocol Wireless Interconnection Product Technology Upgrade Project" and "Smart Home Entry Product R&D and Industrialization Project," achieving an investment progress of 88.31% [2] - The company has completed the "R&D Center Construction Project," with a total investment of RMB 24.44 million, of which RMB 16.47 million has been utilized, resulting in a surplus of RMB 10.80 million [3][6] Group 2: Project Changes and Adjustments - The company plans to adjust the investment structure of the "Smart Transportation and Intelligent Driving R&D and Industrialization Project," reducing the investment by RMB 21.04 million and reallocating it to the new "Edge AI Processor Product and Solution R&D Project" [4][5] - The total investment for the new project is estimated at RMB 45.83 million, with RMB 31.85 million sourced from the adjusted funds [12][13] - The completion date for the "Smart Transportation and Intelligent Driving R&D and Industrialization Project" has been extended to June 30, 2026, to accommodate the changes [5][11] Group 3: New Project Details - The new project focuses on developing low-power, high-performance edge AI chips and solutions, targeting smart home, wearable devices, and automotive electronics [12][14] - The project aims to create a comprehensive technology system, including hardware, algorithms, and software, to enhance the company's competitive edge in the AIoT market [15][16] - The company has a strong R&D team, with 86.52% of its workforce dedicated to research, ensuring effective project execution [18] Group 4: Regulatory Compliance and Approval - The adjustments to the fundraising projects have been reviewed and approved by the company's board and supervisory committee, pending shareholder approval [21] - The company has established a dedicated account for managing the raised funds, ensuring compliance with regulatory requirements [20]

Group 1: Macro Insights - The first round of China-US trade talks has made substantial progress, exceeding market expectations, which will inject more certainty and stability into the global economy, further highlighting the irreplaceability of Chinese manufacturing and enhancing the investment value of Chinese assets [3] - The latest comprehensive tariff rate imposed by the US on China has decreased to 42.5%, which is expected to reduce China's exports by 4.0-5.2 percentage points and GDP by 0.5-0.7 percentage points, indicating significant downward pressure on China's economy [3] - The report emphasizes the importance of monitoring three key areas regarding China-US negotiations: potential fluctuations in tariffs, the main topics of negotiation, and the progress of negotiations between the US and other countries that may involve China [3] Group 2: Convertible Bonds - The report indicates that balanced convertible bonds have a high risk premium and are suitable for long-term allocation, while timing strategies have not significantly improved performance [4] - Conversely, equity-linked convertible bonds have a low risk premium but high timing value, with strategies based on valuation improving risk-adjusted returns [4] Group 3: Communication Industry - The company focuses on the optical communication industry, with its main business covering optical chips and devices, benefiting from the rapid development of AI and increasing demand from data centers [5] - The projected net profits for the company are estimated at 382 million, 539 million, and 713 million yuan for 2025, 2026, and 2027, respectively, with corresponding PE ratios of 35, 25, and 19 [5] Group 4: Electronics Industry - The company is a leader in video codec technology and is expanding into new fields such as automotive electronics and edge AI, with a comprehensive product plan for AI SoC series [6] - Expected revenues for the company are projected to be 2.49 billion, 3.07 billion, and 3.63 billion yuan for 2025, 2026, and 2027, with net profits of 140 million, 230 million, and 310 million yuan, respectively [6] Group 5: Automotive Industry - The company reported a revenue of 3.6 billion yuan in 2024, a decrease of 8% year-on-year, while Q1 2025 revenue increased by 12% year-on-year, driven by growth in domestic new energy vehicle sales [8] - The company has maintained a competitive edge through continuous investment in technology and R&D, enhancing its production capabilities and expanding its product offerings [9][10]

Investment Rating - The report maintains an "Outperform" rating for the telecommunications industry, indicating an expected performance exceeding the benchmark index by more than 10% [1][38]. Core Insights - The launch of the AI agent platform Manus signifies a maturation of intelligent agent capabilities, with significant market interest and a rapid increase in computational token consumption [4][11]. - Manus is designed to integrate various capabilities, including planning, tool usage, and memory, which are essential for executing complex tasks and will lead to a substantial increase in computational demand [4][12]. - The report emphasizes that the domestic computational power sector is currently the largest investment theme, with recommendations to focus on companies benefiting from capital expenditures by CSPs and operators [5][13]. Summary by Sections Industry Investment Rating - The telecommunications industry is rated as "Outperform" with expectations of exceeding the benchmark index by over 10% [1][38]. Market Performance - The overall market saw an increase during the week of March 3 to March 9, 2025, with the Shenwan Communications Index rising by 2.81% and the STAR Market Index increasing by 2.67% [6][14]. Key Developments - The Manus AI platform has been released, showcasing advanced capabilities in handling various tasks, which has garnered significant attention in the market [4][11]. - The report highlights that the introduction of Manus will lead to a dramatic increase in the consumption of computational tokens, with a single task running cost estimated at approximately $2, significantly lower than previous models [4][12]. Investment Recommendations - The report suggests focusing on domestic computational power, particularly in sectors such as servers, switches, optical modules, and IDC infrastructure, which are expected to benefit from increased capital expenditures [5][13]. - It also recommends monitoring overseas computational sectors for innovations in NV technology and ASIC capital expenditures, especially with upcoming events like GTC2025 [5][14]. - Attention is drawn to edge AI applications, particularly in IoT modules and edge computing, as they align with privacy compliance requirements [5][14]. Notable Companies to Watch - Domestic computational power: Unisplendour, Ruijie Networks, Guangxun Technology, Huagong Technology, Guanghuan New Network, Aofei Data, Chaoxun Communication, Langwei Co [5][15]. - Overseas computational power: NewEase, Tianfu Communication, Zhongji Xuchuang, Taicheng Light, Guangku Technology, Dingtong Technology, Wolong Nuclear Materials [5][15]. - Edge AI: Guanghetong, Yiyuan Communication, Meige Intelligent, Yuntian Leifeng, Yinghantong, Tianzhun Technology, Heertai, Tuobang Co [5][15].