Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The AI application market is experiencing varied activity levels, with OpenAI launching its most powerful model, GPT-5Pro API, aimed at high-end markets such as research and law, priced at $15 per million tokens [12] - Intel has officially entered the 2nm era with its 18A node, marking a significant milestone in its manufacturing capabilities, although the yield and performance remain to be validated [18][22] - The Taiwanese storage industry is showing signs of recovery driven by AI demand, with companies like Phison and Winbond reporting significant revenue increases [24][27] - The Chinese smartphone market saw a decline in sales, with a 6.24% year-on-year drop in August 2025, while the PC market remained relatively stable [28][34] Summary by Sections AI Applications - The activity of AI chat applications has been affected by the holiday season, with notable changes in user engagement [10][12] - Google's new Gemini model aims to enhance AI's ability to interact with web pages, reflecting the competitive landscape in AI agent functionalities [13] AMD vs. NVIDIA - The InferenceMAX framework reveals that the competition between AMD and NVIDIA is nuanced, with performance depending on model types and interaction levels [14][15] - NVIDIA maintains an edge in low to mid-interactivity scenarios, while AMD shows competitive potential in specific high-interactivity tasks [16][17] Intel's 18A Node - Intel's 18A node represents a critical step in its strategy to regain advanced manufacturing credibility, with the first products expected to ship by late 2025 [22][23] Taiwanese Storage Industry - Phison's revenue reached NT$6.515 billion in September 2025, driven by a nearly 300% increase in PCIe SSD controller shipments, indicating strong AI-related demand [24] - Winbond reported a revenue high of NT$21.77 billion in Q3 2025, benefiting from rising DRAM contract prices and a recovering demand cycle [27] Smartphone and PC Market - In August 2025, China's smartphone sales reached approximately 20.8 million units, reflecting a decline, with Apple and OPPO leading in market share [28] - The domestic PC market remained stable, with desktop sales declining slightly and laptop sales showing a modest increase [34]

Core Viewpoint - The acquisition of a controlling stake in Jiahe Jingwei by Shikong Technology marks a significant strategic shift, allowing the traditional engineering company to enter the high-growth storage sector, while providing Jiahe Jingwei with the necessary capital for expansion and technological advancement [1][5][6]. Group 1: Acquisition Details - Shikong Technology announced plans to acquire a controlling stake in Jiahe Jingwei through a combination of share issuance and cash payment, with the transaction expected to constitute a major asset restructuring [1]. - The acquisition has led to a temporary suspension of Shikong Technology's stock, anticipated to last no more than five trading days [1]. Group 2: Jiahe Jingwei's Position - Jiahe Jingwei, established in 2012 and recognized as a national "specialized and innovative" enterprise, holds nearly 200 independent intellectual property patents and has developed significant technological advantages in firmware algorithm development and chip testing [3]. - The company plays a crucial role in the domestic storage industry, having launched China's first "China chip" memory module in 2020 and being a pioneer in DDR5 module development [3]. Group 3: Market Conditions and Expansion Needs - The current AI wave has created a tight supply-demand situation in the DRAM and NAND markets, with Morgan Stanley predicting a potential 10-year high prosperity cycle for storage, and double-digit price increases in the coming quarters [5]. - Jiahe Jingwei is in a critical expansion phase, with plans to invest 300 million yuan in new business areas such as smart automotive and information security by the end of 2024 [5]. Group 4: Shikong Technology's Strategic Shift - Shikong Technology has faced continuous losses from 2021 to 2024, with a reported loss of 66.27 million yuan in the first half of 2025, and accounts receivable exceeding 400 million yuan [6]. - The acquisition allows Shikong Technology to pivot from a traditional engineering firm to a semiconductor technology company, fundamentally reshaping its valuation logic [6]. Group 5: Future Prospects and Challenges - The acquisition is expected to accelerate Jiahe Jingwei's growth, leveraging the financing capabilities and brand endorsement of a publicly listed company to fill funding gaps for expansion and R&D [5][6]. - However, the acquisition is still in the preliminary stages, having only signed a letter of intent, and its successful implementation remains uncertain pending multiple layers of approval [6].

Market Overview - The A-share market experienced fluctuations this week, with the Shanghai Composite Index rising by 0.37%, while the Shenzhen Component and ChiNext Index fell by 1.26% and 3.86% respectively. The Hang Seng Index dropped by 3.13% [1] - In terms of sector performance, non-ferrous metals, coal, and steel led the gains, increasing by 4.44%, 4.41%, and 4.18% respectively. Conversely, media, electronics, and power equipment sectors saw declines of 3.83%, 2.63%, and 2.52% respectively [1] Sector Analysis Cyclical Sector - Non-ferrous metals, coal, steel, oil and petrochemicals, and construction materials showed strong performance, particularly benefiting from enhanced expectations of a Federal Reserve interest rate cut [1] Consumer Sector - The tourism sector experienced a decline, with the National Day and Mid-Autumn Festival data meeting expectations, leading to profit-taking by some investors. Innovative pharmaceuticals also saw a pullback due to a lack of short-term catalysts [1] Technology Sector - The storage sector performed well, likely due to overseas industrial information catalysts, while the gaming sector faced significant adjustments, negatively impacting media performance [1] Manufacturing Sector - The energy storage lithium battery sector experienced a pullback, possibly due to export control policies. The robotics sector showed volatility, and the nuclear fusion theme performed well [1] Debt Market - The bond market strengthened overall, with the 10-year government bond yield at 1.77%, down 2 basis points from the previous week. The central bank's reverse repos totaled 10,210 billion yuan, resulting in a net withdrawal of 16,423 billion yuan [2] - China's foreign exchange reserves slightly increased to 333.87 billion USD by the end of September, up by 16.5 billion USD from the end of August. The gold reserves also rose to 74.06 million ounces, marking an increase of 40,000 ounces [2] Consumer Spending Trends - During the National Day and Mid-Autumn Festival holiday, domestic travel reached 888 million trips, with total spending of 809 billion yuan, an increase of 108.19 billion yuan compared to the previous year. However, per capita daily spending was 113.9 yuan, down 13.1% year-on-year [3] Federal Reserve Insights - The Federal Reserve's September FOMC meeting minutes indicated a consensus among most members for further interest rate cuts this year, although there were differing views on the pace and path of future cuts [4]

Company Summary - Demingli (SZ 001309) announced on October 10 that major shareholder Wei Hongzhang will解除质押 on 2.4 million shares, reducing his pledged shares to 2.5 million, which is 20.62% of his total holdings [1] - As of the announcement date, Demingli's market capitalization stands at 44.9 billion yuan [1] - For the first half of 2025, Demingli's revenue is entirely derived from the storage industry, accounting for 100% of its business [1]

Investment Rating - The investment rating for the storage industry is "Positive" and is maintained [8] Core Viewpoints - The current storage cycle is fundamentally different from previous cycles, driven by AI demand which is continuously increasing storage needs. The industry logic is transitioning from a supply-side controlled production cycle to a demand-driven cycle where supply gaps are gradually forming [2][6] - The report maintains a positive outlook on the storage industry due to the prevailing growth logic [2][6] Demand Side Summary - For HDD and SSD, the "train-inference-train" cycle of large models is leading to a sustained expansion in storage demand. Nearline HDD is currently experiencing supply shortages, with delivery times extending beyond 52 weeks. North American CSP manufacturers are locking in HDD production capacity for 2026 based on demand [12] - DRAM demand is also expected to grow, driven by the increasing capacity and shipment of HBM alongside the growth of Server DRAM (e.g., DDR5). If AI PCs and AI mobile devices continue to develop, overall DRAM demand is likely to increase further [12] Supply Side Summary - Over the past few years, storage manufacturers have not effectively released large-scale production capacity, focusing instead on AI-related demand. New capacity takes a long time to come online, leading to a relatively rigid supply release based on utilization rate improvements [12] - The current storage cycle is characterized by a shift from a supply-controlled price cycle to a demand-driven cycle with gradually forming supply gaps [12] Price Outlook - The storage market is expected to see price increases in 2026 due to strong AI demand, with manufacturers continuing to tilt production capacity towards server products, thereby squeezing consumer-grade supply. According to TrendForce, storage prices are expected to rise continuously [12] Industry Chain Summary - The report highlights key companies within the storage industry chain, including module and distribution companies, niche storage firms, supporting industry chain companies, and core players in the Changxin/Changcun industry chain [23]

Core Viewpoint - The company is enhancing collaboration with key suppliers, including Yangtze Memory Technologies, to stabilize the supply chain and optimize costs in response to market changes and technological innovations [1] Group 1: Supplier Collaboration - The company is deepening cooperation with core suppliers to create favorable conditions for supply chain stability and cost optimization [1] - Continuous communication regarding market changes and technological innovations is emphasized [1] Group 2: Market Demand and Business Development - The demand for enterprise storage in the server and data center sectors is increasing due to the AI infrastructure wave, leading to improved industry conditions [1] - The company is closely monitoring the dynamics of major customer demands and is actively promoting business connections [1] - The company's enterprise storage products have achieved stable shipments, with specific performance impacts to be detailed in future regular reports [1] Group 3: Competitive Advantage - Collaboration with core suppliers on technology adaptation and deep partnerships with major customers enhances the company's ability to provide customized storage solutions [1] - The company is accumulating experience in AI storage and domestic scenarios, reinforcing its market competitiveness centered on R&D innovation [1] - This foundation supports the company's business development in relevant fields [1]

Core Viewpoint - The company is enhancing collaboration with key suppliers, including Yangtze Memory Technologies, to stabilize the supply chain and optimize costs, driven by the growing demand for enterprise storage in the server and data center sectors due to the AI infrastructure wave [1] Group 1: Supplier Collaboration - The company is deepening cooperation with core suppliers to address market changes and technological innovations, which creates favorable conditions for supply chain stability and cost optimization [1] - Ongoing communication with suppliers is essential for adapting to market dynamics and ensuring a robust supply chain [1] Group 2: Market Demand and Business Development - There is a continuous increase in enterprise storage demand driven by the AI infrastructure wave, which is enhancing the overall prosperity of the storage industry [1] - The company is closely monitoring the demand dynamics from major clients and is actively advancing business connections related to enterprise storage products, which have achieved stable shipments [1] Group 3: Competitive Advantage - Collaborations with core suppliers and deep partnerships with major clients will strengthen the company's ability to provide customized storage solutions that integrate hardware, technology, and supply chain [1] - The company is accumulating experience in AI storage and domestic scenarios, reinforcing its market competitiveness centered on R&D innovation [1]

Group 1 - Chinese scientists have achieved the world's first two-dimensional silicon-based hybrid architecture flash memory, addressing key challenges in the engineering of new two-dimensional information devices [1] - The research on two-dimensional materials is still in its early stages internationally, with large-scale applications yet to be realized [1] Group 2 - SEMI's latest report forecasts that global spending on 300mm wafer fab equipment will reach $374 billion from 2026 to 2028, with spending exceeding $100 billion for the first time in 2025, growing by 7% to $107 billion [2] - The total equipment spending in the storage sector over the next three years is expected to reach $136 billion, with DRAM-related equipment investment exceeding $79 billion and 3D NAND investment reaching $56 billion [2] Group 3 - The National Healthcare Security Administration and the National Administration of Traditional Chinese Medicine have announced a pilot program for fee-for-service payment for traditional Chinese medicine in about 15 provinces or cities [3] Group 4 - The Ministry of Industry and Information Technology and other departments have adjusted the technical requirements for new energy vehicles eligible for vehicle purchase tax exemptions for 2026-2027 [4] Group 5 - The stock ETF market in September attracted over $111.3 billion, marking a significant inflow of funds, with notable contributions from ETFs tracking Hong Kong stock indices and other sectors [5] Group 6 - IDC reported that the accelerated server market in China reached $16 billion in the first half of 2025, more than doubling compared to the same period in 2024, with projections to exceed $140 billion by 2029 [6] Group 7 - The Ministry of Industry and Information Technology and the National Standardization Administration have announced plans to establish over 30 new national and industry standards for cloud computing by 2027 [7][8] Group 8 - Shanghai's agricultural authorities have launched a joint breeding project with a maximum funding of $5 million per year, aimed at innovative breeding aligned with national strategic needs [9] Group 9 - The margin trading rates for SMIC and Bawen Storage have been adjusted to zero due to their static price-to-earnings ratios exceeding 300, a regulation aimed at enhancing risk control in margin trading [10] Group 10 - During the National Day and Mid-Autumn Festival, key monitored commercial enterprises in Inner Mongolia reported a 3.5% year-on-year increase in sales, driven by various consumer promotion activities [11]

Market News - US stock indices collectively declined, with the Dow Jones down 0.52%, Nasdaq down 0.08%, and S&P 500 down 0.28%. Notable tech stocks had mixed performances, with Oracle up over 3% and Meta up over 2%, while Apple and Google fell over 1% [1] - Spot gold fell 1.6% to $3975.95 per ounce, while COMEX gold futures dropped 1.95% to $3991.10 per ounce. Spot silver reached a historical high of $51.24 per ounce before closing at $49.21, up 0.74%. COMEX silver futures fell 2.73% to $47.66 per ounce. International crude oil prices also declined, with WTI down 1.65% to $61.52 per barrel and Brent down 1.57% to $65.21 per barrel [2] Industry Insights - A research team from Fudan University has developed the world's first two-dimensional-silicon hybrid architecture flash memory, which could revolutionize traditional storage architectures and enhance data storage for AI applications. The prototype achieved a record speed of 400 picoseconds for non-volatile storage, addressing challenges posed by the physical limits of Moore's Law [3] - According to a recent SEMI report, global spending on 300mm wafer fab equipment is expected to reach $374 billion from 2026 to 2028, with spending surpassing $100 billion for the first time in 2025. The storage sector is projected to see a total equipment expenditure of $136 billion over the next three years, driven by limited capacity and unexpected demand [4][5] - The humanoid robot DR02, developed by Yunshen Technology, has achieved an IP66 rating for water and dust resistance, making it suitable for outdoor operations. The robot's design closely resembles that of an adult male, standing at 175 cm tall [6] - The humanoid robot industry is poised for significant growth, with 2025 expected to be a key year for market expansion. Major companies are focusing on upgrading component performance and reducing costs, which will likely lead to increased domestic production and sales of robots [6] Stock Movements - Huawang Technology announced that a shareholder plans to reduce their stake by up to 611,520 shares, representing 1.1% of the total share capital [7] - Mould Technology's controlling shareholder plans to reduce their stake by up to 918,020 shares, accounting for 1% of the total share capital [7] - WuXi AppTec plans to sell 30.3 million shares of WuXi AppTec Holdings, approximately 2.47% of the total share capital, for about HKD 2.346 billion [7]

Core Viewpoint - The company Shikong Technology plans to acquire a controlling stake in storage company Jiahe Jingwei through a combination of share issuance and cash payment, marking a significant asset restructuring without changing the actual controller of the company [2][5]. Company Summary - Shikong Technology has identified its transaction counterparties as Zhang Lili and Chen Hui, who are the actual controllers of Jiahe Jingwei, holding a combined 50.19% stake in the company [5][6]. - As of September 30, Shikong Technology's stock price was 35.83 yuan per share, with a total market capitalization of 3.55 billion yuan [5]. - The company has been on a trading suspension since October 9, with an expected duration of no more than five trading days [5]. Industry Summary - Jiahe Jingwei, established in 2012, specializes in the design, research, production, and sales of DRAM and NAND Flash memory, and is recognized as a national high-tech enterprise [6]. - The company has over 20,000 square meters of production facilities and a daily testing capacity of 500,000 chips, with a memory module production capacity of 30,000 units per day [7]. - The storage industry is currently viewed positively, with global memory chip prices rising and predictions of a "super cycle" in the storage chip sector driven by AI demand [9]. - The global storage market is projected to reach a record high of $193.2 billion by the second half of 2025, fueled by strong demand for AI-related storage applications [9].