Summary of Conference Call on Domestic Computing Power Industry Industry Overview - The conference call focuses on the domestic computing power industry in China, particularly in the context of AI and related technologies [2][3][5]. Key Insights and Arguments - **Opportunities in Domestic Computing Power**: The domestic computing power market aligns with global trends in AI, presenting opportunities for domestic substitution, which could enhance growth potential as the overall market environment improves [2]. - **Expected Gaps Between Domestic and Overseas Computing Power**: In 2026, there are anticipated gaps in market perception, with domestic industry sentiment perceived as weaker than overseas. However, long-term capital expenditure in the domestic internet sector is expected to align closely with overseas levels due to GDP and user acceptance factors [3]. - **Catalysts for Growth**: Key catalysts for the growth of domestic computing power in 2026 include policy support, significant events, and performance forecasts, particularly in January [5]. - **CSP Capital Expenditure Trends**: Overseas CSP capital expenditure is projected to grow by approximately 50% in 2026, while domestic growth is expected to be 30-40%. However, historical data suggests that domestic capital expenditure could catch up in the coming years due to supply chain improvements and technological advancements [6]. - **Government Initiatives**: The Chinese government is likely to introduce plans related to intelligent computing during the 14th Five-Year Plan, which could serve as a significant catalyst for the development of AI and related industries [7]. Market Dynamics - **Current Market Conditions**: The market is currently at a low point, but a turning point is expected in the first half of 2026 with clearer market dynamics following internet tenders. Policy support is crucial for the listing of startups, although some advanced cards have not yet been permitted in the domestic market [9]. - **Performance of NVIDIA's H200**: The H200 product is primarily used in the training market, while domestic cards focus on inference needs. Although the H200 may not maintain its competitive edge in 2026, it will not significantly impact the trend towards self-sufficiency in China [11]. - **Chip Development by Major Companies**: Companies like Huawei, Haiguang, and Cambricon are advancing their chip technologies, with Huawei set to launch the 950 series in 2026, while Haiguang's products are expected to compete with NVIDIA's H100 [12]. Emerging Companies and Market Potential - **Startups**: Emerging companies such as Mu Xi, Mo Er, and Bi Ren Technology are rapidly advancing, with varying focuses on supply chain compatibility and performance optimization. Their growth potential is significant, with some companies showing strong revenue and profit growth [13]. - **Future Market Growth**: The outlook for the domestic chip market over the next two to three quarters is optimistic, driven by developments in supercomputing nodes and the resolution of supply chain issues [15]. Investment Recommendations - **Focus Areas for Investors**: Investors are advised to concentrate on the domestic computing power sector, particularly processor companies, server-related enterprises, and supercomputing core node companies. Early positioning in these areas is recommended [17]. - **Risks in the Sector**: Potential risks include macroeconomic impacts on downstream demand and intensified market competition. Individual company fundamentals may also affect overall industry performance [18]. Additional Important Points - **Domestic Inference Demand**: The demand for inference in China remains strong, with local models progressing rapidly, indicating a positive outlook for domestic capital expenditure and innovation [8]. - **Key Market Trends**: The development of supercomputing nodes and the ability to streamline domestic supply chains are critical for shaping the market landscape in 2026 [16].