Financial Data and Key Metrics Changes - Super Micro achieved record revenue of $12.68 billion in Q2 FY 2026, representing a 123% year-over-year growth and a 153% quarter-over-quarter increase, exceeding guidance of $10 billion to $11 billion [6][16] - Non-GAAP gross margin for Q2 was 6.4%, down from 9.5% in Q1, impacted by customer and product mix, as well as higher freight and production costs [18] - GAAP operating expenses were $324 million, up 14% quarter-over-quarter and 8% year-over-year, while non-GAAP operating expenses were $241 million, up 18% quarter-over-quarter and 6% year-over-year [19] Business Line Data and Key Metrics Changes - The enterprise channel revenue segment totaled $2 billion, representing about 16% of revenue, down from 31% in the prior quarter, but up 42% year-over-year [17] - The OEM appliance and large data center segment revenue was $10.7 billion, representing approximately 84% of Q2 revenue, up from 68% in the last quarter, and up 151% year-over-year [17] Market Data and Key Metrics Changes - By geography, the US represented 86% of Q2 revenue, Asia 9%, Europe 3%, and the rest of the world 2% [17] - Year-over-year, US revenue increased 184%, Asia grew 53%, Europe decreased 63%, and the rest of the world increased 77% [18] Company Strategy and Development Direction - The company is focusing on the development of its Data Center Building Block Solution (DCBBS) to enhance profitability and customer value, expecting DCBBS to contribute significantly to profits by the end of calendar 2026 [9][10] - Super Micro is expanding its global manufacturing footprint, with new production sites in Taiwan, Malaysia, and the Netherlands, to optimize cost structure and support regional AI requirements [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for AI and IT infrastructure, indicating that the DCBBS solution is well-positioned to meet customer needs for faster and more efficient data center builds [13] - The company guided for at least $12.3 billion in revenue for Q3 FY 2026 and raised full-year revenue guidance to at least $40 billion, reflecting a conservative estimate considering supply constraints [14][25] Other Important Information - Cash flow used in operations for Q2 was $24 million, a significant improvement from $918 million used in the prior quarter, with a closing inventory of $10.6 billion [21] - The company has expanded access to working capital through a $2 billion cash flow-based secured revolving credit facility and a $1.8 billion secured Taiwan revolving debt facility [21] Q&A Session Summary Question: Margin Improvement Expectations - Management indicated that customer mix is improving and that gross margins are expected to improve quarter-over-quarter due to reduced expedite transportation costs and tariff impacts [28] Question: Full-Year Guidance Clarification - Management stated that the $40 billion guidance is conservative and that business is expected to continue growing, particularly with the DCBBS attracting more customers [37] Question: Component Shortages Impact - Management acknowledged that component shortages are a significant factor but emphasized that demand is strong, which is a positive sign for growth [61] Question: Customer Mix and DCBBS Adoption - Management noted that DCBBS is appealing to a wide range of customers, including large, medium, and small-scale data center builders, indicating a broad market appeal [63] Question: Future Customer Diversification - Management expressed optimism about increasing customer diversification, with a focus on both large and mid-sized enterprise customers [81]

Core Viewpoint - The merger between Haiguang Information and Zhongke Shuguang is aimed at enhancing competitiveness in the domestic chip market, particularly against Huawei, with a focus on integrating their strengths in chip development and computing services [1][5][7]. Company Overview - Haiguang Information, established in 2014, focuses on domestic architecture CPU and DCU chip design, and has rapidly grown, achieving a revenue of 9.162 billion yuan in 2024, a 52.4% increase year-on-year, and a net profit of 1.931 billion yuan, up 52.87% [2][3]. - Zhongke Shuguang, founded in 2006, specializes in high-end computing, storage, and data center products, but has faced a decline in revenue, with a projected 2024 revenue of 13.148 billion yuan, down 8.4% [3][5]. Financial Performance - Haiguang Information's current market capitalization is approximately 316.41 billion yuan with a P/E ratio of 147.28, while Zhongke Shuguang's market cap is around 90.572 billion yuan with a P/E ratio of 46.33 [2][3]. - Zhongke Shuguang's net profit is significantly supported by investment income and government subsidies, with 5.73 billion yuan from equity method investment gains and 5.29 billion yuan from government grants, together accounting for 57% of its net profit [3][4]. Market Position and Competition - The merger is expected to create a strong competitor to Huawei in the domestic chip market, as both companies have different technological routes but similar strengths [5][6]. - Haiguang Information is the only domestic company with the capability to develop x86 architecture CPUs, which allows for compatibility with existing software ecosystems, reducing migration risks for users [5][6]. Strategic Implications - The merger is seen as a strategic move to consolidate resources and enhance market presence in the face of increasing competition from Huawei's chip offerings, particularly in the AI and cloud computing sectors [5][7]. - The combined entity aims to leverage their respective strengths to create a more comprehensive ecosystem, potentially increasing their market share and competitiveness against established players like Huawei [5][7].