Summary of Global Server Market and AI Server Insights Industry Overview - The report focuses on the global server market, particularly the AI server segment, with projections extending to 2027E. The analysis includes various types of servers such as ASIC AI servers, AI training servers, AI inferencing servers, general servers, and HPC servers [1][14]. Key Insights Market Projections - The global server market is projected to grow significantly, with total revenues expected to reach **US$359 billion**, **US$474 billion**, and **US$563 billion** in 2025E, 2026E, and 2027E respectively, reflecting year-over-year growth rates of **42%**, **32%**, and **19%** [14][30]. - AI server shipments are expected to increase, with **10 million**, **14 million**, and **17 million** AI chips required in 2025E, 2026E, and 2027E, respectively. The contribution of ASIC shipments is projected to rise from **38%** in 2025E to **45%** in 2027E [1][8]. AI Server Segment Growth - High power AI servers (powered by **500 TFlops+ ASIC and GPUs**) are forecasted to see a **21%** and **39%** increase in volume estimates for 2025E and 2026E, respectively. Inferencing AI servers are expected to grow by **3%** and **5%** in the same years [3][11]. - Full rack AI servers are estimated to ship **19,000** units in 2025E, increasing to **67,000** units by 2027E, with a total addressable market (TAM) of **US$54 billion**, **US$157 billion**, and **US$232 billion** for 2025E, 2026E, and 2027E respectively [11][30]. Cloud Service Provider (CSP) Capital Expenditure - Leading US CSPs are projected to increase their capital expenditure (capex) by **67%**, **23%**, and **15%** year-over-year from 2025E to 2027E. In contrast, leading Chinese CSPs are expected to grow their capex by **55%**, **8%**, and **6%** in the same period [8][24][27]. AI Chip Demand - The demand for AI chips is expected to reach **9,990 thousand**, **13,631 thousand**, and **16,551 thousand** units for training and inferencing combined in 2025E, 2026E, and 2027E, respectively. The mix of GPU and ASIC chips is projected to shift, with GPUs making up **62%** in 2025E and decreasing to **55%** by 2027E, while ASICs will increase from **38%** to **45%** [3][20]. Additional Insights Revenue Breakdown - The revenue breakdown for AI servers indicates that training servers will generate **US$189.6 billion**, **US$294.6 billion**, and **US$370.6 billion** in 2025E, 2026E, and 2027E, respectively. High power AI servers are expected to generate **US$135.9 billion**, **US$137.9 billion**, and **US$139 billion** in the same years [30]. - General servers are projected to see revenues of **US$133.7 billion**, **US$140.2 billion**, and **US$146.5 billion** from 2025E to 2027E, indicating a recovery in the general server market [30]. Market Dynamics - The growth in AI applications and increased cloud capex are driving the demand for AI servers. OpenAI's user base has quadrupled to **700 million** weekly active users, indicating a broader adoption of AI technologies [3][11]. Competitive Landscape - The report highlights key players in the AI server market, including ODMs like Wiwynn, Wistron, and Hon Hai, as well as companies involved in silicon photonics and liquid cooling technologies [2]. This comprehensive analysis provides a detailed outlook on the global server market, emphasizing the significant growth potential in the AI server segment driven by technological advancements and increased cloud investments.

Core Insights - The article highlights the presence of undervalued fast-growing companies in the AI market, particularly those involved in AI infrastructure like data centers, despite high valuations in chips and software sectors [1][2]. Company Analysis: Applied Digital - Applied Digital's stock has surged 132% in the last three months, driven by an $11 billion AI infrastructure deal with CoreWeave, validating its strategy in building data centers for AI workloads [4][6]. - The company has secured power for its facilities, which is increasingly valuable as demand for AI accelerates, with some analysts predicting a power shortage in the next five years [5]. - Applied Digital has reduced the build time for new data centers from two years to about one year, allowing for rapid scaling to meet demand [6]. - The company reported a 41% year-over-year revenue growth in the most recent quarter, despite a net loss of $26 million, with a target of $1 billion in operating profit within five years [6][8]. - Applied Digital is in advanced talks for another major deal, which could further enhance its profit potential [7][8]. - The current market cap of Applied Digital is $6.2 billion, valuing the stock at just 6 times the long-term operating profit target, indicating potential for the stock to double in the coming years [8]. Company Analysis: Dell Technologies - Dell Technologies is experiencing strong demand for AI servers, which constitute a significant portion of its revenue, yet the stock trades at less than 15 times forward earnings estimates [9][10]. - In Q2, Dell reported a record revenue of nearly $30 billion, with a 19% year-over-year increase, and over $16 billion from its infrastructure solutions segment [10]. - As a leading supplier of servers, Dell is well-positioned to benefit from the growing demand for AI infrastructure, offering AI-optimized server racks and advanced cooling technologies [11]. - Dell maintains a strong relationship with Nvidia, allowing it to quickly deliver cutting-edge solutions to customers [11]. - The company’s five-quarter pipeline continues to grow, driven by enterprise and government market demand, with a long-term addressable market in AI hardware and services projected at $356 billion by 2028 [12]. - Analysts expect Dell's earnings to reach $12.34 in 2028, suggesting that if valued as a growth stock at 20 times those estimates, the share price could reach $246 in three years, nearly doubling from its recent price of $133 [13].

Summary of AI Server Industry Conference Call Industry Overview - The AI server market is characterized by a "one leader, many strong" pattern, with Inspur Information leading the market, followed by Alibaba, Tencent, ByteDance, and others [1][4] - Major internet companies and AI server manufacturers primarily adopt an ODM collaboration model, where cloud providers propose solutions and server manufacturers participate in R&D and OEM [1][6] Key Insights - **Market Share**: Inspur Information holds approximately 35% to 40% market share among the three major cloud providers, with varying shares for other competitors like Huawei, ZTE, and H3C [4][5] - **Profit Margins**: AI servers have higher gross margins than traditional servers, but competition is fierce. Leading companies like Inspur have gross margins of about 5% to 6% and net profits of 2% to 3%, while second-tier companies have lower margins [1][7] - **Technological Evolution**: The rise of AI has significantly impacted server architecture, shifting from CPU-centric models to heterogeneous computing architectures that include GPUs, NPUs, FPGAs, and DPUs [3] - **Cooling Technologies**: Traditional air cooling is being replaced by liquid cooling solutions due to increased power and cooling demands from AI models [3][12] Competitive Landscape - **Core Advantages of Inspur**: Inspur possesses strong technical capabilities, delivery integration, and extensive industry experience, making it a competitive player in the cloud supply chain [8] - **Domestic GPU Alternatives**: Due to bilateral trade impacts, domestic manufacturers are seeking alternatives to NVIDIA GPUs, with companies like Ascend and Pingtouge emerging, although high-end computing still relies on NVIDIA [1][9] Future Trends - **Cloud Providers' Overseas Deployment**: Companies like ByteDance prioritize overseas deployment, with expectations that their domestic to overseas deployment ratio will shift from 8:2 to 6:4 by 2026 [9] - **Capital Expenditure**: Alibaba's projected capital expenditure for 2026 is approximately 150 billion yuan, with 60% allocated to AI servers and 45% specifically for high-end AI computing [16] Additional Insights - **Factors in GPU Selection**: Cloud providers prioritize performance, single-card computing power, energy efficiency, architecture flexibility, and price when selecting GPU solutions [11] - **Liquid Cooling Development**: Liquid cooling is primarily used in supercomputing nodes, with limited adoption among domestic server manufacturers [12] - **Emerging Supernode Solutions**: Major internet companies are developing supernode solutions, with Alibaba's Panjiu 128 node being the most powerful in the current market [13] Conclusion - The AI server industry is rapidly evolving, driven by technological advancements and competitive dynamics among major players. Companies must focus on enhancing their technological capabilities, optimizing cost structures, and adapting to market demands to maintain a competitive edge.

Investment Rating - The report maintains an Overweight (O/W) rating for Taiwan, Neutral/Weight (N/W) for Korea, and moves Japan to Neutral/Weight from Underweight (U/W), while China is rated Underweight (U/W) from Neutral/Weight [4]. Core Insights - The smartphone industry unit Sell In forecasts have been raised to +3% YoY for 2025 and +1% YoY for 2026, with PC forecasts increased to +4% YoY for 2025 and +3% YoY for 2026, and server forecasts to +6% YoY for 2025 and +4% YoY for 2026 [1][9]. - AI demand remains robust, with expectations for Nvidia's GB200/300 NVL72 racks in 2025 at 28-29k and initial conservative estimates for 2026 at around 50-60k [1]. - The foundry outlook for 3nm and 2nm is strong, driven by AI accelerator projects, while DDR and NAND supply is tightening, with DDR potentially "sold out" until 2027 [2]. - Wafer Fab Equipment (WFE) spending is trending upwards, with forecasts for 2025 at US$109 billion (+12% YoY) and 2026 at US$118 billion (+8% YoY) [3]. Summary by Sections Smartphones - The smartphone market is expected to see unit Sell In of 1.26 billion in 2025 (+3% YoY) and 1.27 billion in 2026 (+1% YoY), with Apple’s iPhone 17 builds projected to increase [9][11]. - Component upgrades in the iPhone 17 series include significant camera enhancements, indicating ongoing technological advancements despite cost pressures [12]. PCs - Global PC unit shipments are forecasted to grow by +4.4% YoY in 2025 and +3.4% YoY in 2026, with commercial segments showing resilient momentum due to the Windows 10 EOL replacement cycle [16][19]. - The report highlights a modestly positive outlook for PC shipments, with consumer PCs expected to grow 0.5% YoY in 2025, while commercial PCs are forecasted to grow by +6.6% YoY [19]. Memory and Foundry - The report indicates a tightening supply for DDR and NAND, with long-term agreements being established by major customers, particularly US hyperscalers [2]. - The outlook for 3nm and 2nm foundries is robust, with expectations for multi-year growth driven by AI projects [2]. Wafer Fab Equipment - WFE spending is expected to increase, particularly from Korean memory makers, with forecasts for domestic China WFE at US$37 billion in 2025 (+3% YoY) [3].

Summary of Datacenter Market Insights – Part 1: Overall Servers Industry Overview - The report focuses on the **Datacenter Market** within the **Hardware Technology** sector in the **Asia Pacific** region, specifically analyzing server shipments and trends in 2Q25 [1][9]. Key Insights - **Total Server Shipments**: Global server shipments reached **4.2 million units** in 2Q25, reflecting a **16% year-over-year (y/y)** growth and a **7% quarter-over-quarter (q/q)** increase. The growth is primarily driven by cloud demand, with expectations for continued growth in AI server shipments throughout 2025 [2][16]. - **AI Server Demand**: AI server yields are improving, with significant increases in average selling prices (ASPs) for major Original Equipment Manufacturers (OEMs) and Original Design Manufacturers (ODMs). High-value server shipments for Dell increased by **181% q/q**, while its overall server shipments declined by **4% q/q** [3][15]. - **Market Dynamics**: The demand for AI servers remains robust, particularly for GB200 racks, which saw shipments grow from **1.1k in 1Q** to approximately **4.9k in 2Q**. Expectations for 3Q shipments are projected to reach **8-9k** [5][6]. - **Regional Performance**: The **US** market outperformed others with a **32% y/y** increase in shipments, while regions like **Japan** and **Rest of the World (RoW)** saw declines of **12% y/y** and **13% y/y**, respectively [12][20]. - **Segment Performance**: High-end server shipments grew **399% y/y** in 2Q, mid-range servers increased by **85% y/y**, and entry-level servers saw a modest growth of **8% y/y**. This trend aligns with the ramp-up of AI server demand [13][14]. Vendor Performance - **ODM Direct Shipments**: ODM direct shipments increased by **46% y/y** and **3% q/q** in 2Q25, with ASPs rising to approximately **US$34.3k**, driven by AI server contributions [15][16]. - **Market Share Changes**: ODM direct market share decreased to **45.4%**, down **2 percentage points** from the previous quarter. Dell's market share fell to **8.2%**, while HP's share increased to **7.7%** [16]. Investment Preferences - The report suggests a preference for components over ODMs/OEMs, highlighting companies such as **Hon Hai**, **Wistron**, **Quanta**, and **Giga-Byte** as favorable investment opportunities [7]. Additional Considerations - **Tariff Impact**: The report notes that tariffs have influenced both enterprise and cloud demand, with expectations of a **5-10% y/y** decline in full-year enterprise demand [2][6]. - **Future Outlook**: Overall momentum for general servers is expected to slow in the second half of 2025, influenced by earlier pull-ins due to tariffs, although actual shipment momentum appears stronger than previously anticipated [6][16]. This summary encapsulates the critical insights and data from the conference call regarding the datacenter market and server shipments, providing a comprehensive overview of current trends and future expectations.

Core Insights - Super Micro Computer launched new servers and AI-optimized systems at the Supermicro INNOVATE! event in Madrid, aimed at enhancing operations in Europe, the Middle East, and Africa [1] - The event highlighted Supermicro's Data Center Building Block Solutions, developed in collaboration with major tech companies like AMD, Intel, and Nvidia [2] - A modular design approach was emphasized, allowing rapid configuration for various workloads, including AI training and edge inference [3] - Supermicro is positioned to benefit from significant AI infrastructure investments, with reports of OpenAI and Nvidia planning substantial investments in UK data centers [4] - The company introduced new AI training servers and expanded its edge portfolio, featuring systems powered by Intel and Nvidia technologies [5] - Supermicro's stock has increased over 50% year-to-date, outperforming the S&P 500 index, which has seen returns of over 13% [5] - In September, Supermicro began global shipments of Nvidia's Blackwell Ultra-powered systems designed for large-scale AI workloads [6]

Group 1 - The liquid cooling server sector experienced a strong initial surge, with Seagull Co., Ltd. hitting the daily limit, Invec rising over 7%, and Shenling Environment increasing by over 4% [1] - Industrial Fulian achieved a new high with an increase of over 3%, while Zhongke Shuguang and Zhongding Co., Ltd. also saw gains [1]

Core Insights - Financial giants are showing a bearish sentiment towards Super Micro Computer, with 53% of traders indicating bearish tendencies and only 28% bullish [1] - The price target for Super Micro Computer has been identified in the range of $16.0 to $65.0 over the last three months, based on options activity [2] - The average open interest for Super Micro Computer options is 3,414.03, with a total volume of 59,534.00 in the last 30 days [3] Options Activity - A total of 63 unusual trades were identified, with 36 puts valued at $2,341,127 and 27 calls valued at $1,699,414 [1] - Noteworthy options activity includes several significant trades, with bearish sentiment dominating, such as a put sweep with a total trade price of $200.4K and an open interest of 20.8K [8] - The trading volume for Super Micro Computer stands at 16,775,967, with the stock price currently at $46.01, reflecting a slight increase of 0.15% [14] Company Overview - Super Micro Computer Inc specializes in high-performance server technology services for various markets, including cloud computing and data centers [9] - The company generates more than half of its revenue from the United States, with the remainder coming from Europe, Asia, and other regions [10] - Analysts have issued a consensus target price of $46.0 for Super Micro Computer, with one analyst recently downgrading the stock to Market Perform [11][12]

Market Overview - U.S. stock index futures are showing mixed performance as investors react to a recent Federal Reserve interest rate cut and anticipate upcoming economic data [1][2] - Major indexes closed at record highs on Thursday, with the Dow Jones Industrial Average up 0.27%, S&P 500 rising 0.48%, and Nasdaq Composite increasing by 0.94% [3] Economic Indicators - The 10-year Treasury yield rose by 2 basis points to 4.13%, while the 2-year yield increased by 1 basis point to 3.58% [2] - Strong labor market data indicated a drop in U.S. Weekly Initial Jobless Claims to 231K for the week ending September 13, below expectations, which reassured investors about economic stability [3] Upcoming Economic Data - Key economic data releases include Flash Purchasing Managers' Index (PMI) surveys and the U.S. core Personal Consumption Expenditures (PCE) price index, scheduled for September 26, 2025 [5] - Other significant upcoming data includes revised GDP numbers, consumer confidence data, home sales figures, durable goods orders, and inventories [5] Corporate Earnings - Several companies are set to report earnings, including MoneyHero Limited, IperionX Limited ADR, and FedEx, which reported better-than-expected FQ1 earnings and projected 4%-6% revenue growth for fiscal year 2026 [6][11] - 22nd Century Group's shares surged 31% after announcing it is now debt-free, while 89bio's shares skyrocketed 85% following Roche's agreement to acquire the biotech firm for $14.50 per share [11] Key Corporate News - Nvidia shares advanced 3.5% after announcing a $5 billion investment in Intel, which saw its stock surge over 23% [7] - CoreWeave's shares rose 0.3% after Loop Capital initiated coverage with a "Buy" rating, highlighting its growing prominence among chip giants and AI labs [11] - FedEx's strong results positively impacted UPS, which saw its stock increase by 2% [11] Stock Movements - Red Cat Holdings' shares fell 12% after pricing an offering of 15.6 million shares at $9.60 each [11] - Nucor's shares slipped 4% after guiding its Q3 EPS to $2.05-$2.15, below the consensus estimate of $2.56 [11]

Group 1: Robotics - The robotics market is experiencing rapid growth, with 4.2816 million operational robots globally in 2023, highlighting significant penetration in industrial sectors [8] - China is the largest market for industrial robots, with a projected sales volume of 302,000 units in 2024, maintaining its position as the world's largest industrial robot market for 12 consecutive years [8][9] - The production capacity of industrial robots in China increased from 33,000 units in 2015 to 556,000 units in 2024, with service robots showing a 34.3% year-on-year growth [8][9] Group 2: Augmented Reality (AR) Glasses - The AR glasses market is growing rapidly, with projected sales of 286,000 units in China for 2024, driven by technological advancements and increased brand competition [17] - Major players in the global AR glasses market include tech giants like Microsoft and Meta, while Chinese brands like Xreal and Rokid dominate the consumer segment [18] - The integration of AI with AR technology is enhancing functionality, enabling features like real-time translation and scene recognition [19] Group 3: Foldable Screens - The foldable screen market is witnessing explosive growth, with an expected global shipment of approximately 19.83 million foldable smartphones by 2025, reflecting a 6% year-on-year increase [24] - China has become the largest market for foldable smartphones, with a market share expected to remain above 40% over the next five years [24] - Innovations in materials, such as ultra-thin flexible glass, are improving durability and user experience, with penetration rates projected to rise from 65% in 2024 to 85% in 2025 [25] Group 4: Servers - The global server market is experiencing significant growth, with a record revenue of $77.3 billion in Q4 2024, representing a 91% year-on-year increase [30] - China's server market is also expanding, with a projected shipment of approximately 4.55 million units in 2024, reflecting a 22% year-on-year growth [30] - The rise of cloud computing is reshaping server applications, leading to increased demand for server clusters and customized solutions [31]