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Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **AI datacenter connectivity sectors** in China, specifically highlighting **copper connectors**, **optical transceivers**, and **PCBs** [1][13] - The analysis identifies **Luxshare**, **Innolight**, **Eoptolink**, **TFC**, **Victory Giant**, and **Sinoma** as key players in their respective segments [1][4] Copper Connectivity - **Copper solutions** are expected to dominate in-rack connectivity due to their cost-effectiveness and low latency for short-reach applications [2][15] - **Luxshare** has experienced a **50% YoY growth** in its communication segment in 1H25, contributing **9%** to corporate revenue [2][22] - The company is projected to gain market share from **Amphenol** for the **GB300 backplane copper connector**, which could positively impact EPS estimates for 2026 [2][23] - **Co-Packed Copper (CPC)** technology is being developed to enhance performance and reduce costs in copper connectivity [24] Optical Transceivers - The demand for **optical transceivers** is driven by the broader adoption of **ASIC chips** and the need for high-speed communication in AI datacenters [3][38] - The market for **Ethernet optical transceivers** is projected to grow at **30-35% annually** in 2025 and 2026, with AI applications increasing from **55% to 65%** of the market by 2030 [38][42] - **Silicon photonics (SiPh)** technology is expected to capture **40% market share by 2025** and **60% by 2030**, contributing to margin improvements for companies like **Innolight** [39][41] - Risks include geopolitical tensions and lower-than-expected ASIC adoptions, which could impact stock performance [3][64] PCB and HDI Market - The **PCB market** is expected to grow at **5% CAGR** over the next two years, with the server/storage sector outpacing this growth at **11% CAGR** [84][88] - The **HDI market** is projected to reach **US$14B** in 2025, with server demand increasing from **5% to 18%** of the market [85][90] - **Victory Giant Technology** is expanding capacity to meet rising demand for HDI, while **Sinoma** benefits from the booming AI demand for PCB materials [4][84] Investment Implications - **Luxshare** is rated **Outperform** with a target price of **RMB 59**, reflecting its strong growth potential in the AI connectivity market [10][31] - **Chroma ATE**, **Unimicron Technology**, and **Delta Electronics** are also rated **Outperform**, indicating positive outlooks for these companies [6][7][8] Additional Insights - The **global connector market** is valued at approximately **US$85B**, with **Luxshare** holding a **4% market share** as of 2022 [21][25] - The transition to **hybrid solutions** combining copper and optical technologies is anticipated to become the norm in the mid-term [16] - The **PCB market** is capital-intensive and cyclical, posing long-term risks despite current growth trends [4][84] This summary encapsulates the key insights and projections regarding the AI datacenter connectivity sectors, highlighting the competitive landscape and potential investment opportunities.