Core Viewpoint - The Shenzhen CPSE Security Expo highlighted innovations in AI and big data for smart security, with Demingli showcasing its industrial-grade storage products and multi-dimensional matrix solutions to meet the demanding performance and reliability requirements of next-generation smart security systems [1] Industry Insights - Security monitoring is a critical data collection component in smart cities, intelligent transportation, and industrial scenarios, responsible for real-time collection, transmission, and storage of massive video data [1] - The proliferation of 4K/8K video and AI recognition technologies results in each camera generating hundreds of GB of data daily, necessitating large monitoring centers to handle thousands of video streams simultaneously [1] Company Solutions - Demingli's industrial-grade storage solutions include: - **VS1030 Series SATA 2.5 inch SSD**: Optimized for 24/7 continuous video recording, supporting AI structured storage and real-time computation, with a steady write bandwidth of 50MB/s, ensuring 16 channels of 4K video can be recorded continuously for 30 days without frame drops [3] - **EP1021 Series PCIe 3.0×4 M.2 2280 SSD**: Designed for high-performance multi-stream support, achieving sequential read speeds of up to 3500MB/s, suitable for NAS systems in high-temperature and high-vibration environments [6] - **Industrial-grade TF Cards**: Featuring wide temperature operation and high durability, these cards utilize SLC/TLC flash technology and are designed to withstand harsh conditions while ensuring data integrity [8] - **Industrial-grade PSSD**: Portable SSDs with capacities from 1TB to 4TB, offering high transfer rates and robust design for quick data export and on-site analysis [10] Strategic Development - Demingli aims to upgrade storage hardware into scenario-based solutions, focusing on a comprehensive industrial-grade storage system that integrates main control chips, firmware algorithms, and customized services [12] - The company emphasizes high reliability, durability, and long-term stable operation across critical sectors such as security monitoring, network communication, industrial control, and energy [12][13] - By leveraging a scalable supply chain and efficient delivery capabilities, Demingli is positioned to rapidly respond to customized demands across various industries, promoting the large-scale implementation of domestic industrial-grade storage solutions [13]

Market Overview - Global financial markets are showing a mixed pattern, with U.S. stock indices experiencing varied performance; the S&P 500 index slightly decreased by 0.004% to 6,890.59 points, while the Nasdaq rose by 0.55%, indicating strong performance in technology stocks [1][3] - The cautious sentiment among investors reflects a balance between optimism regarding corporate earnings growth and uncertainties surrounding macroeconomic conditions [1][3] Commodity Performance - WTI crude oil prices slightly fell to $60.19 per barrel, while gold prices stabilized above $3,990 per ounce, suggesting ongoing risk-averse sentiment in the market [1][3] European Market Dynamics - European stock markets closed mixed, with the FTSE 100 index up by 0.66% due to strong earnings and resilience in the energy sector, while the DAX and CAC 40 indices fell by 0.64% and 0.19%, respectively, as traders locked in profits ahead of upcoming European Central Bank comments [5][8] - The overall tone in the European market remains stable, with local strength in London offset by moderate pullbacks in continental exchanges [5] Future Outlook - Market attention is shifting towards signals from the Federal Reserve and geopolitical developments, with expectations of cautious optimism continuing in trading on October 30 [7] - The relative strength of the Nasdaq index may continue to lead the market, while investors remain alert to potential impacts from oil price fluctuations and geopolitical risks [7]

Core Viewpoint - The performance of storage systems is crucial for enhancing overall training efficiency in AI, as insufficient storage performance can significantly limit GPU utilization [2] Summary by Sections MLPerf Storage v2.0 and Testing Loads - MLPerf Storage is a benchmark suite designed to replicate real AI training loads, assessing storage systems' performance in distributed training environments [3] - The latest version, v2.0, includes three types of training loads that represent the most common I/O patterns in deep learning [3] Specific Training Loads - The 3D U-Net medical segmentation load requires handling large 3D medical images, focusing on throughput performance during sequential reads [4] - The ResNet-50 image classification load emphasizes high-concurrency random reads, demanding high IOPS from storage systems [4] - The CosmoFlow cosmological prediction load tests small file concurrent access and bandwidth scalability, requiring stable metadata handling and low latency [4][5] Performance Comparison Standards - The testing involved various vendors with different storage types, making horizontal comparisons limited; the focus is on shared file systems for more relevant conclusions [6] - Shared file systems are categorized into Ethernet-based systems and InfiniBand (IB) network solutions, each with distinct performance characteristics [7] Test Results Interpretation - For the 3D U-Net load, Ethernet-based storage products like Oracle and JuiceFS excelled, with JuiceFS supporting the most H100 GPUs and achieving a bandwidth utilization of 86.6% [11] - IB network solutions provided high total bandwidth but often exhibited lower bandwidth utilization, typically below 50% [14] - The CosmoFlow load highlighted the challenges of reading numerous small files, with JuiceFS and Oracle leading in GPU support [16][18] - The ResNet-50 load required high IOPS, with JuiceFS supporting the most GPUs and achieving a bandwidth utilization of 72% among Ethernet solutions [21][24] Conclusion - Understanding the type of storage product, including architecture and hardware resources, is essential for evaluating GPU utilization [27] - Ethernet-based storage solutions offer flexibility and cost-effectiveness while providing excellent performance, making them a popular choice for large-scale AI training [27]

Core Viewpoint - The explosive growth of the AI application market is driving a significant demand for high-performance storage, while high GPU procurement costs and the "memory wall" challenge hinder innovation for many companies [2][8]. Group 1: Storage as a Core Driver - In the AI wave, the value of storage has been completely transformed from a mere "warehouse" in IT systems to a key strategic element for enhancing AI system efficiency and reducing Total Cost of Ownership (TCO) [3][4]. - Storage module manufacturers play a crucial role in bridging the gap between different stages of AI data flow, necessitating deep optimization of controllers and flash memory chips to meet future application trends [4][5]. Group 2: Product Differentiation and Performance - AI workflows are driving further differentiation in storage products, with a clear need for tailored eSSD product matrices to meet diverse enterprise requirements [4][5]. - The PCIe 5.0 QLC eSSD series offers a capacity of up to 122.88TB and a sequential read speed of 14,000MB/s, significantly improving TCO and space efficiency compared to traditional hard drives [4][5][7]. Group 3: Overcoming the Memory Wall - The growth rate of AI model parameters has outpaced the linear expansion of top-tier GPU memory, creating a structural gap that traditional strategies cannot bridge [9][10]. - The "Wing AI Super Memory Fusion Solution" aims to address this challenge by expanding GPU memory capacity by 20 times through a high-speed, high-lifespan external cache [10][12]. Group 4: Cost Reduction and Efficiency Gains - The new system architecture allows for a dramatic reduction in training costs, with a 95% decrease in deployment costs for large models, while improving model inference concurrency by up to 50% [12][15]. - The integration of larger model parameters into Flash storage is seen as essential for promoting AI accessibility and cost-effectiveness [12][15]. Group 5: Future Directions and Goals - The company plans to upgrade its eSSD product matrix and integrate storage-computing technologies, with a roadmap to introduce PCIe 6.0 products in the second half of next year [14]. - By 2026, the goal is to deploy 200 billion parameter models on a single PC for under 10,000 yuan, and by 2027, to move trillion-level parameters to personal PCs, promoting widespread AI adoption [14][15].

Core Insights - The demand for real-time access and high-speed processing of massive data is rapidly increasing due to AI inference applications, prompting HDD and SSD suppliers to expand their offerings of large-capacity storage products [1] - The HDD market is facing a significant supply gap, which is encouraging NAND Flash manufacturers to accelerate technological advancements and invest in the production of ultra-large capacity Nearline SSDs, such as 122TB and even 245TB [1] - The development of AI infrastructure and products like smartphones and smart glasses is driving demand in the storage market, with some products experiencing supply shortages [1] - The domestic storage industry is entering a new phase of industrialization and marketization, leveraging technological breakthroughs and product iterations to integrate into the supply chains of leading domestic and international smartphone, PC, and server brands [1]

Core Insights - The demand for real-time access and high-speed processing of massive data is rapidly increasing due to AI inference applications, prompting HDD and SSD suppliers to expand their offerings of high-capacity storage products [1][2] - The HDD market is currently facing a significant supply gap, which is encouraging NAND Flash manufacturers to accelerate the production of ultra-large capacity Nearline SSDs, such as 122TB and 245TB models [1] - The HDD industry is undergoing a painful technological transition, with high initial costs associated with the new HAMR technology leading to a rise in average selling prices (ASP Per GB) from $0.012-$0.013 to $0.015-$0.016, undermining HDD's core cost advantage [1][2] Industry Dynamics - SSDs offer significantly higher IOPS and lower latency compared to HDDs, making them more efficient for AI workloads that involve random data access and quick model parameter retrieval [2] - The power consumption of SSDs is much lower than that of HDDs, which can lead to substantial savings in electricity, cooling costs, and rack space for large data centers, offsetting the higher initial purchase costs of SSDs [2] - As the HDD industry upgrades to HAMR technology and achieves economies of scale, there will be potential for cost optimization; however, NAND Flash's structural advantages in cost reduction and capacity expansion remain significant [2] Market Opportunities - The emergence of the Nearline SSD market presents a significant opportunity for NAND Flash suppliers seeking to diversify beyond smartphone and PC demands, positioning them well for the competition in data center storage architecture over the next decade [2]

Core Insights - The demand for real-time access and high-speed processing of massive data is rapidly increasing due to AI inference applications [1] - The HDD market is facing a significant supply gap, prompting NAND Flash manufacturers to accelerate technological advancements and invest in the production of ultra-large capacity Nearline SSDs [1] - The uncertainty regarding future demand has been alleviated as suppliers respond to the growing needs for large-capacity storage products [1] Industry Summary - AI inference applications are driving the demand for high-capacity storage solutions, leading to increased activity among HDD and SSD suppliers [1] - The production focus is shifting towards ultra-large capacity SSDs, with specifications reaching 122TB and even 245TB [1] - The current market dynamics indicate a positive outlook for storage suppliers as they adapt to the evolving requirements of data processing and storage [1]

Industry Insights - The storage industry is experiencing a significant price increase due to a sudden shortage that began in late August, with expectations that this trend will continue [1] - Major manufacturers have ceased production of DDR4 memory, leading to a sustained supply gap and the highest price increases in the storage sector, particularly for DDR4 and DDR5 products [1] - NAND flash shortages are expected to persist into the first half of next year, driven by strong demand from cloud service providers [1] - HDD shortages are also becoming more severe, with anticipated price increases of 20%-30% for new products announced by Korean manufacturers [1] Company Developments - Micron Technology, Western Digital, and Seagate Technology saw pre-market stock increases of 4.88%, 5.12%, and 4.48% respectively, reflecting positive market sentiment in the storage sector [1] - With major players like Samsung, SK Hynix, and Micron exiting the DDR4 and LPDDR4X markets, there is an optimistic outlook for companies like Zhaoyi Innovation to increase their market share by 2025-2026 [2] - The price of DDR4 and LPDDR4X products is expected to rise significantly, with projections indicating a 40% increase in the first half of 2025 and a potential 75% year-over-year increase by the end of that year [2] - Companies such as Langke Technology and Dawi Co., Ltd. are involved in the production of various storage products, including SSDs and DRAM memory [3]

Core Viewpoint - The company is positioned as a leader in the domestic AI digitalization sector, acquiring Jintaike to enter the storage business, with expectations of exceeding performance growth due to a long-term boom in the storage chip industry and synergies from AI and energy businesses [1] Investment Highlights - Initial coverage with an "Overweight" rating, as the combination of storage chips, AI computing power, and energy is expected to drive growth, with the acquisition of Jintaike potentially opening up a growth curve in AI storage. If the acquisition is successful, projected revenues for the company's traditional business from 2025 to 2027 are estimated at 719 million, 953 million, and 1.191 billion yuan respectively, while Jintaike's revenues are expected to be 3.840 billion, 7.200 billion, and 10.000 billion yuan. The company is assigned a 175x PE for traditional business and an 80x PE for Jintaike's storage business, leading to a reasonable valuation of 20.223 billion yuan and a target price of 299.52 yuan per share [2] - Significant recovery in profitability in H1 2025, with R&D investments strengthening the technological moat. After a short-term performance pressure in 2024, H1 2025 revenue is expected to be approximately 160 million yuan, a year-on-year increase of 2.99%, with a net profit of approximately 3.78 million yuan, a substantial increase of 123%, successfully turning a profit. The AI computing power and large model business performed exceptionally well, with 2024 revenue projected at 124 million yuan, a year-on-year increase of 949.4% [2] AI Computing Power and Digital Energy Product System - The company has established a product system for AI computing power and digital energy, with government and content security solidifying its industry implementation capabilities. In 2024, digital energy revenue is expected to reach 305 million yuan, accounting for 49.3% of total revenue, while AI computing power and large model revenue is projected at 124 million yuan, making up 20.0% of total revenue. The company signed contracts for the Western Computing Center project early in 2024, with products like "KAIWU" industry large models and integrated machines being delivered in multiple locations. The virtual power plant smart control platform is operational at various administrative levels, and a technology research center has been established in collaboration with North China Electric Power University. The AI content security service "Jiumozhi" continues to serve central ministries and large enterprise clients [3] Acquisition of Jintaike and Storage Business - The acquisition of Jintaike aims to enhance AI storage capabilities, providing both scale and profit elasticity. Jintaike's storage business is projected to achieve revenues of 2.366 billion yuan and a net profit of 136 million yuan in 2024, with advantages in enterprise-level DDR4 and domestic DDR5 products, serving clients like Lenovo, Tongfang, and Haier. Major storage giants such as Samsung, Hynix, and Micron are expected to initiate production cuts starting at the end of 2024, with a 10%-15% capacity reduction planned for the first half of 2025, gradually phasing out older products. Demand from data centers and AI server enterprises is becoming dominant, driving both an increase in storage volume and quality, with significant enhancements in memory capacity and performance requirements. The demand for DDR5 and enterprise-level SSDs is expected to sustain long-term growth, with old products being phased out and high-end capacity becoming scarce, indicating a potential increase in both volume and price for the company's storage business orders [4]

Core Insights - Strong earnings, interest-rate cuts, and market optimism have contributed to an unusually strong September, with the S&P 500 nearing record highs [1] - The performance of the index is significantly influenced by major companies, particularly in the technology and storage sectors [2] Company Performance - Western Digital (WDC) has emerged as the S&P 500's second-best-performing stock, with a remarkable 87.6% increase in Q3, leading to a year-to-date return of 168.46% [3] - The growth of Western Digital is largely attributed to data-center buildouts, with revenue for fiscal 2025 reaching $9.52 billion, reflecting a 51% increase, and a forecasted 22% growth for the upcoming quarter [4] - Warner Bros. Discovery (WBD) experienced a significant rise of 70.42% in Q3, driven by plans to separate its legacy and streaming media platforms [5] - Seagate Technology (STX) also benefited from similar market conditions, achieving a 63.6% increase in Q3 [7]