Investment Rating - The report maintains an "Add" investment rating for the electronic industry, indicating a positive outlook for the sector over the next six months [1]. Core Insights - Huawei's UB Mesh architecture addresses the cost and performance challenges associated with large model training, achieving a 2.04 times cost efficiency improvement compared to the Clos architecture [3]. - The UB Mesh architecture utilizes a 4D/5D topology, allowing for high bandwidth, low-cost, and high-reliability AI training clusters, significantly reducing the reliance on expensive network infrastructure [6][7]. - The report highlights the potential for Huawei's Ascend 920 series chips to capture a significant market share in domestic computing power demand, driven by their innovative capabilities and the ongoing trend of domestic computing power substitution [7]. Summary by Sections Industry Trends - The UB Mesh architecture is designed to meet the demands for large-scale AI training clusters, providing a flexible multi-dimensional aggregation that reduces transmission overhead [6]. - The architecture's reliance on short-distance direct interconnections minimizes costs and enhances system reliability, with 86.7% of the system's cabling being passive [6]. Performance Comparison - Under the same training benchmarks, the UB Mesh architecture demonstrated similar performance to the Clos architecture while significantly lowering hardware costs, with a reduction in network infrastructure costs from 67% to 20% [3]. - The operational cost savings from reduced use of high-performance switches and optical modules amounted to a 35% decrease [3]. Market Opportunities - The report identifies several companies in the supply chain that may benefit from the advancements in Huawei's technology, including SMIC, Huafeng Technology, and others [7].