Summary of Key Points from the Conference Call Industry Overview - The conference focused on the **indigenous AI supply chain in China**, highlighting the growth potential and challenges within the sector [1][4]. Core Insights 1. **AI Chip Demand Growth**: - AI chip unit demand is projected to grow at a **CAGR of nearly 40% by 2027**, with locally developed chips expected to gain market share [1][4]. - Demand for **2-3 million AI chips** is estimated for 2025, with **Huawei** and **Cambricon** expected to ship **600k** and **140k** units respectively [3][4]. 2. **Local Memory Solutions**: - **CXMT**, China's largest DRAM maker, plans to build **HBM capacity**, with **HBM2e** already sampled and **HBM3** expected by the end of 2025 [3][4]. - The qualification of locally produced HBM chips is anticipated to take time, but capacity will support the ramp-up of AI chips in **2H26** [3][4]. 3. **Open Source Ecosystems**: - The industry is moving towards open-source ecosystems, with **China Mobile** announcing a **Rmb5.1 billion** AI server tender, where **70%** of servers are based on Huawei's open-sourced **CANN** platform [3][4]. 4. **Networking Bottlenecks**: - Local AI chip suppliers face performance losses due to inter-chip communication, with losses estimated at **40-50%** for local solutions compared to **20-30%** for Nvidia's offerings [4][5]. 5. **Indigenous AI Supply Chain Enablers**: - Companies like **Huaqin** and **Inspur** are positioned to benefit from the increasing shipments of local AI solutions, with a positive sentiment expected to persist in the market [4][5]. Additional Important Insights - The mix of AI chips in China is currently around **50:50** for training and inference, but it is estimated that **70%-75%** of future AI chips will be inference-based, primarily supplied by local vendors [3][4]. - The indigenous AI supply chain is expected to see a **3-4x year-on-year increase** in local capacity by 2025, which is particularly beneficial for non-Huawei players [3][4]. - The **A-share Tech index** increased by **27%** during the same period that **Cambricon** saw over a **100%** increase in stock value, indicating strong market performance [4][5]. Conclusion - The indigenous AI supply chain in China is poised for significant growth, driven by increasing demand for AI chips, advancements in local memory solutions, and a shift towards open-source ecosystems. Companies like Huaqin and Inspur are well-positioned to capitalize on these trends, while challenges such as networking bottlenecks remain to be addressed.