Core Viewpoint - The release of DeepSeek's V3.1 model highlights a significant shift in the domestic AI ecosystem, emphasizing the collaboration between software and hardware through the introduction of the UE8M0 FP8 floating-point format designed for next-generation domestic chips [6][11]. Group 1: Technical Innovations - DeepSeek's V3.1 model features a mixed reasoning architecture, improved thinking efficiency, and enhanced agent capabilities [6]. - The UE8M0 FP8 format prioritizes numerical range stability over decimal precision, allowing for stable training on domestic GPUs, which differ from NVIDIA's hardware [11][13]. Group 2: Competitive Landscape - The competition around FP8 standards represents a broader struggle for computational ecosystem dominance, with NVIDIA solidifying its position through the Blackwell architecture and MXFP8 format [13]. - Domestic AI firms are encouraged to innovate collaboratively from models to chips, as seen with companies like Muxi and Suiyuan Technology optimizing FP8 computation efficiency [13][18]. Group 3: Future Trends - The collaboration between hardware and software, even at the cost of temporary performance compromises, is likely to become a prevailing trend in the industry [14]. - The UE8M0 FP8 format signifies a critical step for the domestic AI industry, moving from isolated breakthroughs to comprehensive stack collaboration, which may offer more long-term value than merely increasing model scale [16].

Group 1 - DeepSeek released DeepSeek-V3.1, utilizing UE8M0 FP8 Scale parameter precision, designed for the upcoming domestic chip [1][3] - Multiple stocks in the computing sector surged, with notable increases such as 6.29% for SMIC and 17.19% for Haiguang Information [1] - Cambrian Technology, a major domestic AI chip company, reported significant revenue growth, achieving 11.11 billion yuan in Q1 2024, up from 0.26 billion yuan year-on-year [3] Group 2 - Several AI chip manufacturers, including Moer Technology and Suiyuan Technology, support FP8 precision computing, enhancing performance by 20%-30% in large model training [4] - The domestic computing power industry is seeing increased utilization of domestic chips, with companies like iFlytek using fully domestic computing power for large model training [4][5] - Recent reports from securities firms indicate a stable growth in the semiconductor supply chain, with rising wafer foundry capacity and a positive outlook for the semiconductor market [5]

Core Viewpoint - The A-share market is experiencing a strong upward trend, with significant growth in the computing power industry chain, particularly in areas such as liquid cooling, CPO, and AI chips, leading to record-high stock prices for several leading companies [2][3]. Group 1: AI Chips - The global AI chip market is projected to reach $53.6 billion in 2023 and is expected to surge to $71 billion in 2024, with a growth rate exceeding 30% [3]. - Domestic AI chip manufacturers are rapidly closing the performance gap with global leaders like NVIDIA, with local brands accounting for approximately 20% of the market in the first half of 2024 [3]. - Companies such as Cambrian and others are achieving significant stock price increases, with some seeing over 100% growth year-to-date [4]. Group 2: Optical Modules - The optical module market is forecasted to grow at a compound annual growth rate of 22% from 2024 to 2029, potentially exceeding $37 billion by 2029 [5]. - Seven Chinese companies are among the top ten global optical module manufacturers, indicating strong domestic capabilities [5]. - Leading companies in this sector have reported earnings that exceed market expectations, with stock prices reaching historical highs [6]. Group 3: PCB (Printed Circuit Boards) - The PCB industry is experiencing a boom, with eight leading companies achieving record-high stock prices, driven by the demand from AI hardware and electric vehicles [7][8]. - The market for AI server and switch PCBs is estimated to reach between $50 billion to $60 billion by 2026 [7]. - A significant majority of PCB companies listed in A-shares reported revenue growth, with some companies like Shenghong Technology seeing net profit increases of over 300% [8]. Group 4: Liquid Cooling - The liquid cooling technology market is witnessing explosive growth due to increasing demands for efficient heat dissipation in data centers [9][10]. - Major tech companies like NVIDIA and Google are adopting liquid cooling solutions, which are expected to expand into various network devices [10]. - The liquid cooling server concept index has risen over 15% since August, reflecting strong market interest [9]. Group 5: AI Servers - The domestic AI server market has been growing at an annual rate exceeding 20% since 2022, with a market size projected to surpass 69.3 billion yuan by 2024 [15]. - The restrictions on high-end GPU exports have created a favorable market environment for domestic AI server manufacturers [15]. - Companies involved in AI server production are expected to benefit significantly from the growing demand for computing power [15][16].

Core Insights - A-shares indices showed collective strength on August 8, with the Shanghai Composite Index rising by 0.05%, driven by gains in sectors such as comprehensive, non-ferrous metals, and steel, while the computer and electronics sectors faced declines [1] Semiconductor Industry - Global semiconductor sales reached $179.7 billion in Q2 2025, marking a year-on-year increase of 19.6% and a quarter-on-quarter increase of 7.8%, continuing a trend of seven consecutive quarters of year-on-year growth [1] - China's semiconductor sales in Q2 2025 amounted to $51.7 billion, accounting for 28.8% of the global total, with a year-on-year growth of 13.1% [1] - Domestic high-performance AI hardware capabilities are advancing, with significant developments in domestic AI chips such as Ascend 384, Cambricon 690, and others, indicating a promising outlook for the domestic AI-related semiconductor sector [1] Chip ETF Overview - The Chip ETF (159995) tracks the Guozheng Chip Index, which includes 30 leading companies in the A-share chip industry across materials, equipment, design, manufacturing, packaging, and testing, featuring firms like SMIC, Cambricon, and Northern Huachuang [2]

Investment Rating - The report maintains an investment rating of "Outperform the Market - A" [5] Core Insights - The 2025 World Artificial Intelligence Conference (WAIC) showcased significant advancements in AI technology, particularly in computing power, algorithms, and applications, indicating a robust growth trajectory for the industry [12][60] - Domestic manufacturers are progressively enhancing their chip performance from inference to training, emphasizing ecosystem support and application scenarios [13][60] - The report highlights the emergence of quantum computing as a disruptive innovation in the computing power industry, with potential for exponential growth in computational capabilities [38][39] Summary by Sections 1. Industry Overview - The WAIC 2025 featured over 800 companies and more than 3000 cutting-edge exhibits, marking the largest scale in its history [12] - The conference focused on AI technology frontiers, industry trends, and global governance practices [12] 2. Computing Power - Domestic chip manufacturers are evolving from inference-focused AI chips to high-performance training chips, showcasing various industry applications [13] - The report notes the importance of supernodes, integrated machines, and liquid cooling solutions as key trends in the future of domestic AI computing power [18][19] 3. Algorithms - The evolution of large models is highlighted, with a shift towards multi-modal capabilities and the integration of deep reasoning and thinking abilities [43][44] - The report emphasizes the growing importance of AI agents and physical AI, which aim to enable intelligent agents to understand and interact with the real world [43][44] 4. Applications - The report identifies a flourishing landscape for both B2B and B2C AI applications, with significant advancements in areas such as AI glasses, smart driving, and robotics [60] - C-end applications focus on AIGC and productivity tools, while B-end applications emphasize cost reduction and efficiency improvements across various sectors [60][61] 5. Quantum Computing - Quantum computing is positioned as a critical future technology, with companies showcasing solutions that leverage quantum mechanics for superior computational capabilities [38][39]