Group 1 - The report highlights the significance of the 2025 World Artificial Intelligence Conference (WAIC) held in Shanghai, showcasing advancements in AI technology and global collaboration opportunities, which are expected to drive industrial intelligence upgrades [2][11][12] - In June, the profits of industrial enterprises above designated size decreased by 1.8% year-on-year, with a notable recovery in the equipment manufacturing sector, indicating the positive impact of the "two new" policies [14][17] - The manufacturing PMI for July was reported at 49.3%, reflecting a slight decline of 0.4 percentage points from the previous month, indicating a cooling in manufacturing activity, although the production index remains above the critical point, suggesting overall expansion in production activities [19][22] Group 2 - The investment strategy emphasizes the development of new productive forces as a key policy direction, suggesting a focus on sectors such as artificial intelligence, innovative pharmaceuticals, robotics, and deep-sea technology for potential excess returns [3][33] - There is a strong recommendation to boost domestic consumption, with expectations for consumer spending to increase, particularly in new consumption, home appliances, and automotive sectors [3][33] - The report suggests that gold may see sustained demand as a safe-haven asset amid rising geopolitical tensions and global economic uncertainties, indicating a long-term investment opportunity in gold [3][33]

Investment Rating - The industry investment rating is "Outperform the Market," indicating that the industry index is expected to perform better than the benchmark index over the next 6-12 months [11]. Core Insights - The report highlights the launch of Huawei's Ascend 384 super node, which represents a shift in the domestic AI industry from a chip-centric approach to a system-coordinated optimization strategy. This development showcases the robust growth momentum of the domestic computing power industry chain [3][6]. - The Ascend 384 super node, consisting of 12 computing cabinets and 4 bus cabinets, integrates 384 Ascend 910C NPUs and 192 Kunpeng CPUs, achieving a theoretical performance close to twice that of NVIDIA's GB200 NVL72. It provides 300 PFLOPS of BF16 computing power, addressing the bottlenecks in large model training through high-speed interconnect technology [3][6]. - The report emphasizes the strong order fulfillment capability of the Ascend platform, which has been widely applied in high-computing scenarios across various sectors, including finance, power, transportation, and government [3][6]. Summary by Sections Industry Development Trends - The report notes that the domestic AI computing power industry is expanding, driven by the increasing demand for controllable AI infrastructure amid high-end chip shortages and export restrictions. The success of the Ascend 384 super node demonstrates the feasibility of achieving a closed-loop in the domestic computing power industry chain [3][6]. Investment Recommendations - The report suggests prioritizing investments in the domestic AI computing power network infrastructure, focusing on telecom operators such as China Mobile, China Telecom, and China Unicom, as well as server and switch equipment manufacturers like ZTE, Unisoc, Inspur, and Ruijie Networks [3][6]. Market Dynamics - The report indicates that significant investments from major players like Alibaba, which plans to invest over 380 billion yuan in cloud computing and AI hardware infrastructure over the next three years, will open up larger market opportunities for domestic computing power solutions [3][6].

Market Overview - The market experienced a significant decline, with the Shanghai Composite Index dropping by 1.18%, the Shenzhen Component Index falling by 1.73%, and the ChiNext Index decreasing by 1.66% [1] - The trading volume in the Shanghai and Shenzhen markets reached approximately 19.36 trillion yuan, an increase of about 91.7 billion yuan compared to the previous trading day, with over 4,200 stocks declining [2] Sector Performance - Cyclical stocks, including coal, steel, oil, and non-ferrous metals, led the market decline, with the steel sector falling over 3% and both non-ferrous metals and coal sectors dropping more than 2% [5] - Notable individual stock declines included Angang Steel and Baosteel, which fell over 7%, while Yunnan Zinc and Northern Rare Earth dropped more than 5% [5][6] Futures Market - Multiple previously popular futures contracts saw significant declines, with glass and coking coal main contracts dropping by 8%, polysilicon falling over 7%, and industrial silicon and lithium carbonate decreasing by over 6% and nearly 5%, respectively [7] - The Dalian Commodity Exchange has adjusted trading limits for certain contracts to maintain market stability, including a reduction in daily opening positions for industrial silicon, polysilicon, and lithium carbonate [8] Domestic Semiconductor Sector - Following a significant meeting with Nvidia regarding security risks associated with its H20 computing chip, domestic semiconductor stocks surged, with companies like Dongxin Co. and Cambrian Technologies seeing substantial gains [10] - Domestic GPU companies are accelerating their development, with firms like Moer Technology and Muxi Integrated Circuit announcing IPO plans to raise funds for GPU research and market expansion [12] Infant and Child Industry - The infant and child sector continued to show strength, with companies like Sunshine Dairy and Anzheng Fashion achieving three consecutive trading limits, while several others saw notable increases [14] - The Chinese government has allocated approximately 90 billion yuan for child-rearing subsidies, and Beijing has introduced measures to enhance support for childbirth, including establishing a subsidy system and improving maternity insurance [16]

Core Viewpoint - Huawei's HiSilicon has launched RISC-V architecture chips, indicating a shift from ARM and signaling the beginning of a new strategic phase for the company [1][2][4] Group 1: RISC-V Chip Launch - HiSilicon released two RISC-V chips, Hi3066M and Hi3065P, aimed at smart home appliances and industrial applications, respectively [2][3] - Hi3066M is designed for low-power AI applications in home appliances, while Hi3065P targets high-performance control in industrial settings [2][3] Group 2: Challenges Ahead - RISC-V faces challenges in software ecosystem development, with a lack of tools compared to x86 and ARM, which may hinder its adoption in AI and cloud computing [2][3] - Performance issues in high-performance computing scenarios, such as AI model training, need to be addressed for RISC-V to compete effectively [3] - Multi-core synchronization and communication efficiency are critical areas that require improvement to enhance overall performance [3] Group 3: Implications for Huawei - The launch of RISC-V chips reflects Huawei's response to the limitations imposed by ARM's licensing restrictions, which have stifled innovation and performance upgrades [4][5] - Huawei's reliance on outdated ARM architecture has led to performance issues in its Kunpeng CPUs, affecting market competitiveness [4][5] - The transition to RISC-V may represent Huawei's only viable path forward, given the challenges faced with ARM [5][6] Group 4: Ecosystem Impact - Shifting to a new chip architecture will significantly impact Huawei's existing software and application ecosystem, potentially leading to losses for upstream and downstream partners [6][7] - The transition poses risks of disrupting the established ecosystem, as previous investments in ARM-based development may not be transferable to RISC-V [6][7] - The RISC-V ecosystem is still developing, and Huawei must work to build a robust support system for developers and partners to ensure a smooth transition [7]

Core Viewpoint - The article discusses the recent developments regarding Nvidia's H20 chip and its implications for the Chinese market, highlighting the security concerns raised by the Chinese government and the subsequent rise of domestic alternatives in the GPU sector [1][2][6]. Group 1: Nvidia's H20 Chip and Security Concerns - The Chinese government has summoned Nvidia to explain the security risks associated with the H20 chip, citing laws related to cybersecurity and data protection [1][2]. - The H20 chip, designed specifically for the Chinese market, has faced scrutiny due to potential backdoor vulnerabilities, leading to increased calls for advanced chips to include tracking and remote shutdown features [2][5]. Group 2: Market Reactions and Domestic Alternatives - Following the news of Nvidia's security issues, domestic companies like Cambrian Technology saw significant stock price increases, with Cambrian rising over 7% [1][6]. - Several domestic GPU companies, including Moore Threads and Muxi Integrated Circuit, are accelerating their development and have recently filed for IPOs to raise funds for GPU research and market expansion [6]. - Moore Threads aims to raise 8 billion yuan for its GPU development, indicating strong market potential and a commitment to enhancing domestic capabilities in AI and graphics processing [6]. Group 3: Technological Advancements - Huawei has announced the CloudMatrix384AI super node, significantly enhancing its computing power from 6.4 pFLOPS to 300 pFLOPS, marking a 50-fold increase [7]. - The new architecture supports advanced AI model inference, improving throughput and reducing latency, showcasing the rapid advancements in domestic technology [7].

Core Viewpoint - Huawei's Ascend is positioning itself as a competitive alternative to NVIDIA by leveraging a system-level engineering breakthrough rather than focusing solely on individual chip performance [5][12]. Technical Breakdown - The "CloudMatrix 384 Super Node" consists of 384 Ascend 910 chips and 192 Kunpeng CPUs, interconnected to function as a single efficient unit [2][4]. - Unlike NVIDIA's reliance on copper cables for inter-chip communication, Huawei has developed a fully peer-to-peer interconnect bus using optical cables, significantly enhancing data transmission efficiency [8][10]. - Huawei's approach includes advanced mathematical algorithms for scheduling, deep hardware-software collaboration, and effective thermal management, contributing to the overall performance of the Ascend system [11]. Competitive Landscape - Huawei acknowledges a gap in chip technology, as NVIDIA has advanced to 3nm processes, while Huawei's chips are still a generation behind [14]. - The software ecosystem remains a challenge, with Huawei's CANN still needing to catch up to NVIDIA's established CUDA framework [15]. - Despite these challenges, Huawei is gaining traction in the Chinese market, especially as companies adapt to domestic chips due to restrictions on NVIDIA's products [16]. Industry Dynamics - The domestic AI chip market is diversifying into three main factions: tech giants like Huawei, pure chip manufacturers, and niche players focusing on specific applications [16]. - The pressure from U.S. sanctions has inadvertently spurred growth in China's semiconductor industry, allowing companies like Huawei to innovate and optimize system performance rather than solely competing on chip specifications [16][17].