Summary of Key Points from the Conference Call on China's Data Centers Industry Overview - The focus is on the data center (DC) industry in China, particularly in remote areas, driven by the demand for artificial intelligence (AI) and the "Eastern Data, Western Computing" policy [1][30][40]. Core Insights and Arguments 1. **Market Dynamics**: The demand for data centers in remote areas is expected to grow significantly, with a projected 66% year-over-year increase in total data center orders, reaching 3.4GW in 2026. Remote areas are forecasted to experience a compound annual growth rate (CAGR) of 54% from 2025 to 2028, compared to 28% in Tier 1 cities [31][88]. 2. **Capacity Growth**: China's installed data center capacity is expected to reach approximately 44GW by 2028, which will be about 43% of the US capacity at that time. This represents a CAGR of 18% from 2025 to 2028 [2][89]. 3. **Shift in Demand**: The previous cloud cycle saw a 50:50 split between Tier 1 markets and remote areas. In the AI era, remote areas are anticipated to capture 70-80% of the volume due to scale needs and resource availability [3][88]. 4. **Policy Influence**: The NDRC's policy is directing new data center deployments to specific hubs in West China, which aligns with the current AI model training requirements. This policy is expected to foster a healthier market by controlling oversupply [3][40][41]. 5. **Cost Advantages**: Power costs in remote areas like Ulanqab are significantly lower (56% lower than nearby Hebei), making them more attractive for data center operations. The total cost of ownership is also more favorable in these regions [51][48]. Key Players and Recommendations 1. **Preferred Companies**: GDS Holdings and VNET are highlighted as top picks due to their strategic pivots and resource buildup in remote areas. Other notable players include Centrin and Chindata [4][35]. 2. **Emerging Hubs**: Ulanqab in Inner Mongolia and Zhongwei in Ningxia are identified as key beneficiaries of the AI era, with Ulanqab currently having a capacity of 490k racks and Zhongwei aiming for 300k racks by the end of 2025 [61][62][114]. 3. **Investment Returns**: The yield on cost (YoC) for data centers in both Tier 1 markets and remote areas is expected to stabilize around 11%, indicating that the economic viability will depend on scale rather than location [117][118]. Additional Important Insights 1. **Construction and Delivery**: The construction cycle for data centers has shortened from 1-2 years to 6-9 months, improving responsiveness to market demand and reducing the risk of oversupply [37][106]. 2. **Hyperscaler Strategies**: Hyperscalers are shifting towards outsourcing data center needs rather than relying solely on in-house facilities, which is a significant change from previous strategies [103]. 3. **Latency Considerations**: AI workloads are less sensitive to latency, allowing for more flexibility in data center locations compared to the cloud era, where proximity to Tier 1 cities was crucial [56][102]. This summary encapsulates the critical insights and projections regarding the data center industry in China, emphasizing the shift towards remote areas driven by AI demand and supportive government policies.

Summary of Conference Call on AI Infrastructure and Related Industries Industry Overview AI Data Center (AIDC) - China's AIDC market experienced a significant surge in the second half of 2025, driven by rapid AI adoption and advancements in domestic chip technology [1][7] - ByteDance's token usage increased dramatically from 4 trillion in February to 30 trillion in September 2025 [1][7] - AIDC investments are primarily led by cloud vendors, telecom operators, and third-party firms, with construction costs ranging from RMB 17,000 to 23,000 per kW [1][8][9] - Major players like ByteDance, Tencent, and Huawei are actively pursuing new data center projects, including a notable 800MW park for ByteDance [1][10] Liquid Cooling - Liquid cooling technology in China has low adoption rates, remaining below 10% in 2025, compared to over 3,000 units deployed overseas [2][14] - The market for liquid cooling is projected to grow at a 64% CAGR from 2025 to 2030, with penetration expected to rise from 10% in 2025 to 45% by 2030 [2] - Cold plate systems dominate the liquid cooling market with a 90% share, while immersion cooling faces high costs and lacks standardization [2][15] - Domestic competition is intense, leading to significant price gaps; CDU pricing ranges from US$10 to 230 per kW [2][16] Optical Fiber - China accounts for approximately 50% of global fiber demand, with projections of 260 million fiber-km domestically and 568 million globally by 2025 [3][19] - The optical cable market is expected to grow at a 5% CAGR, with a shift towards high-end products like G654E fiber and hollow-core fiber [3][20] - Profitability in the optical fiber market is concentrated upstream, with preforms contributing 70% of profits, fiber 20%, and cables only 10% [3][22] - Intense domestic competition has led to price reductions, making it challenging for smaller players to survive [3][21] Key Insights AIDC Developments - The AIDC market is rebounding due to broader AI applications across various sectors, including manufacturing and healthcare [7] - Domestic chips are being commercially deployed, although they still lag behind NVIDIA's technology [7] - The construction of training clusters in western China is part of the "Eastern Data, Western Computing" strategy [8] Liquid Cooling Market Dynamics - The domestic AI market is in an early stage of rapid growth, with server memory prices tripling [13] - Liquid cooling systems are becoming critical components of the data center value chain, with export opportunities emerging [11][18] - Future growth in liquid cooling will depend on cost reductions and advancements in microchannel technology [2][18] Optical Fiber Market Trends - The demand for fiber optic communication is projected to reach nearly 170 million fiber-kilometers in 2025 [19] - Export opportunities are concentrated in Southeast Asia, while Europe and North America present challenges due to trade barriers [20] - Emerging technologies like hollow-core fiber and multi-core fiber are expected to enhance competitiveness in the market [21] Conclusion - The AIDC, liquid cooling, and optical fiber industries are poised for significant growth driven by technological advancements and increasing demand for AI applications. However, challenges such as intense competition and reliance on imported components may impact profitability and market dynamics in the near future.