Summary of Conference Call on Optical Module Industry Industry Overview - The optical module industry is experiencing a significant shift due to the explosive demand from the North American inference market, which is expected to enhance the sustainability of capital expenditures in 2025 [1][4] - Chinese companies are playing an increasingly important role in the technological iteration of optical modules, particularly in high-end products like 800G and 1.6T, leading to a growing market share and concentration towards leading firms [1][6] Key Insights and Arguments - The demand for pluggable optical modules in the inference market has been underestimated, with a notable increase in the ratio of ASIC chips to optical modules, such as Meta and Amazon's ratios of 1:6 to 1:8, and Huawei's Cloud Matrix reaching 1:18 [1][7] - The second quarter of 2025 saw a sharp increase in the optical module market, primarily driven by the North American inference demand and the ramp-up in 800G laser module demand, with expectations for continued growth in the third and fourth quarters [1][8] - Major tech companies in North America are making substantial investments in AI computing, which supports the demand for optical modules, with leading companies currently undervalued [1][10] Market Performance and Investor Sentiment - Since May, the optical module industry has seen a significant rise, particularly with companies like Xuchuang showing outstanding performance. However, investors have mixed views on future trends, focusing on market saturation, short-term positioning, and future development [2] - The optical module industry underwent adjustments from June to November 2023 due to slowing user growth for GPT-4 and concerns over the sustainability of capital expenditures, but a recovery is anticipated with the rise of Sora optical interconnect technology [3] Supporting Evidence for Industry Growth - Three key pieces of evidence support the growth of the optical module industry: performance guidance from inference chips like ASICs, growth in enterprise leasing in computing, and the significant increase in token consumption by major companies like Google [5] - The trend towards optical interconnect technology is expected to increase hardware demand significantly, as the industry shifts from copper to optical connections in scale-up networks [14] Future Investment Opportunities - The outlook for investment in the optical module sector remains optimistic, with accelerated AI model iterations and substantial investments in AI computing by major U.S. companies [9][10] - The upcoming 1.6T product upgrade cycle is expected to bring significant changes, with major companies likely to see accelerated performance [12] Company-Specific Insights - Taiyuan Optical's recent performance showed a net profit of approximately 94 million yuan, which, while not meeting expectations, remains within a reasonable range. Concerns about revenue and profit margins are considered short-term issues [19][25] - The revenue share of Taiyuan Optical in Corning's optical communication enterprise network business has fluctuated between 8% and 12% over the past several years, with a recent increase to 9% in Q2 2025 [20] - Despite lower revenue growth compared to Corning, Taiyuan Optical's performance in Q2 2025 indicates a healthy trajectory, with expectations for continued growth in the latter half of the year [21][25] Conclusion - The optical module industry is poised for growth driven by technological advancements and increased demand from the AI sector, with significant contributions from both North American and Chinese companies. The market dynamics suggest a favorable environment for investment, particularly in leading firms within the sector.

Investment Rating - The report maintains an "Outperform" rating for the communication industry [5][66]. Core Insights - The communication industry is experiencing robust growth driven by AI infrastructure and high demand for related products, particularly in the optical communication and AI server sectors [4][66]. - Major domestic optical communication companies are seeing rapid revenue growth, with significant contributions from high-speed optical modules [2][31]. - The three major telecom operators are showing stable performance with increasing dividends, indicating a solid investment opportunity [4][42]. Summary by Sections Industry News Tracking - Industrial Fulian reported a revenue of 360.76 billion yuan in H1 2025, a year-on-year increase of 35.58%, with net profit rising by 38.61% [13]. - Lumentum's cloud computing and networking business grew by 66.5%, with Q4 revenue reaching $480.7 million, up 55.9% year-on-year [21][22]. - AVC's revenue for H1 2025 was 52.927 billion New Taiwan dollars, a 66.48% increase, driven by strong demand for AI server cooling and chassis products [25]. Domestic Optical Communication Companies - Huagong Technology's revenue in H1 2025 was 7.629 billion yuan, up 44.66%, with net profit increasing by 44.87% [31]. - Taicheng Technology achieved a revenue of 828 million yuan in H1 2025, a 62.49% increase, with net profit rising by 118.02% [36][37]. Telecom Operators Performance - China Mobile reported a revenue of 543.8 billion yuan, a slight decrease of 0.5%, but net profit increased by 5.0% [48]. - China Telecom's revenue grew by 1.3% to 269.4 billion yuan, with net profit increasing by 5.5% [48]. - China Unicom's revenue reached 200.2 billion yuan, up 1.5%, with net profit growing by 5.1% [48]. Market Performance Review - The communication sector index rose by 7.66%, outperforming the Shanghai and Shenzhen 300 index, which increased by 2.37% [3][62]. - The optical module and device sectors showed strong performance, with significant gains in stock prices [63]. Investment Recommendations - The report suggests focusing on AI computing infrastructure, particularly in optical communication and domestic computing sectors [4][66]. - Long-term investment in the three major telecom operators is recommended due to their stable operations and increasing dividend payouts [4][66].

Summary of Conference Call Records Industry Overview - The cloud service industry is experiencing significant capital expenditure (CAPEX) growth, with major players like Meta and Google expected to spend $72 billion and $85 billion respectively in 2023, requiring over 10% quarter-on-quarter growth in the second half of the year [1][2] - The optical module industry saw a quarter-on-quarter growth of 30% in Q2, with leading companies achieving up to 50% growth, indicating a strong demand driven by cloud service investments [1][3] Key Points and Arguments - **CAPEX Growth**: North American cloud providers' total CAPEX reached approximately $95 billion, a year-on-year increase of 66.59% and a quarter-on-quarter increase of over 30% [2] - **Microsoft's Performance**: Microsoft reported a Q2 CAPEX of $24.2 billion, a year-on-year increase of over 50%, with expectations to reach $30 billion in Q3, indicating a robust growth trajectory in cloud services [6] - **Future Industry Outlook**: The industry is expected to maintain a healthy growth rate of around 30% over the next few quarters, with potential for further upward revisions in performance forecasts [7] - **Optical Interconnect Market**: The optical interconnect market is projected to achieve a compound annual growth rate (CAGR) of approximately 20% from 2027 to 2030, driven by the expansion of single-node computing scenarios [8] - **AI Investments**: Google is heavily investing in AI applications, achieving a monthly growth rate of nearly 40% in AI token processing, indicating a closed-loop formation in AI applications that stimulates demand for training and inference computing power [1][13] Additional Important Insights - **Domestic IDC Valuation**: The domestic IDC sector shows reasonable valuations, with companies like Runze and David having price-to-earnings ratios around 25 times, while Data Harbor and Guanghuan Xinwang are around 15-16 times, suggesting opportunities for investment in undervalued companies [3][16] - **Technological Trends**: Key technological directions include GEL up, OIO, and CPU developments, with significant increases in fiber optic connections anticipated in future applications [10][12] - **Investment Opportunities**: The current IDC market presents stable investment opportunities, particularly in companies like Guanghuan and Data Harbor, which have a high safety margin [17] - **Concerns Over PCB Technology**: There are market concerns regarding the impact of orthogonal backplane PCB technology on the copper cable sector, but advancements in high-speed copper AEC are expected to maintain demand in data centers [19] This summary encapsulates the critical insights from the conference call, highlighting the growth trends, investment opportunities, and technological advancements within the cloud and optical interconnect industries.

Summary of Dongshan Precision's Conference Call Company Overview - Dongshan Precision has entered the Apple supply chain through the acquisition of Weixin, leading to a fivefold increase in revenue after a three-year capital expenditure cycle, establishing a duopoly in the flexible circuit board (FPC) industry alongside Pengding, capturing a significant portion of the global market share [2][5] Financial Performance - Since 2019, Dongshan Precision's operating cash flow has surged, indicating strong profitability [2][6] - The company has improved overall profitability by scaling back unprofitable segments such as LED packaging and LCM modules [2][6] - The flexible circuit board business is expected to maintain a profit growth rate of around 25% annually, driven by increased demand for foldable screens [2][6] Strategic Acquisitions - The acquisition of Solstice has positioned Dongshan Precision favorably in the 800G optical module sector, with plans to expand production to 400,000 units per month [2][7] - Solstice's capability to self-supply optical chips mitigates potential supply bottlenecks, enhancing its prospects of becoming an industry leader [2][7] - A $1 billion investment plan for expanding rigid board production includes the acquisition of Cat Tech, which has decades of experience in high-end PCB manufacturing [2][8] Market Position and Future Outlook - The rigid board factory, acquired in 2018, has undergone significant transformation and maintains solid profitability despite the time required for heavy asset integration [2][9] - The focus on AI PCB technology is expected to drive substantial growth, with investments of 1-2 billion RMB already made for technological upgrades [3][11] - Dongshan Precision is projected to become a key player in the PCB industry by 2026, with potential incremental demand of $10 billion and the establishment of over $500 million in new fixed asset production capacity [4][12] Challenges and Competitive Landscape - The company faces profit pressure from high-end capacity investments made by competitors during the industry's peak in 2021, which will impact profits from 2022 to 2024 [4][10] - Despite historical valuation challenges due to shareholder structure, the market is expected to recognize the company's value as it aligns with the growing demand for AI hardware [4][13] Conclusion - Dongshan Precision is strategically positioned for growth in the flexible and rigid PCB markets, with strong financial performance, strategic acquisitions, and a focus on emerging technologies like AI PCB, setting the stage for significant future expansion and market leadership [2][12][13]

Summary of Key Points from Conference Call Industry Overview - The overseas computing power market is experiencing strong demand growth, exceeding previous pessimistic expectations, particularly in the optical module industry, which is seeing growth rates surpassing forecasts [2][1]. - The optical module market is expected to see significant growth driven by AI, with demand for 800G modules projected to reach 35-40 million units and 1.6T modules expected to reach 6-7 million units by 2026, maintaining an overall revenue growth rate of at least 50% [3][11]. Core Companies and Performance - Core companies in the optical module market include Xuchuang and Xinyi, both showing strong performance with Q2 results significantly exceeding market expectations, with Xinyi's revenue reaching approximately 2.4 billion yuan [5][4]. - Other notable companies include Bochuang and Taichuang, which are also performing well in the MPO segment, and Jin Tong and Woer in the same supply chain [5]. Profitability Trends - The profitability of the optical module industry is on the rise due to increased demand driven by AI, with new product price reductions narrowing to 10-15% compared to the previous 20% [3][4]. - Xuchuang's net profit margin and gross profit margin are expected to improve, indicating a continuing trend of profitability enhancement through 2026 [3][4]. Impact of NVIDIA's Supply Chain - NVIDIA's supply chain is significantly boosting the optical module industry, with Industrial Fulian reporting a Q2 profit of 6.7-6.9 billion yuan, a 30% year-on-year increase, largely due to accelerated shipments of NVIDIA GPU cabinets [6][8]. - The release of NVIDIA's GB200 and GB300 cabinets is expected to further drive industry growth in the second half of the year and into 2026 [6][8]. Model Iteration and Demand - The release of advanced AI models such as OpenAI's GPT-5 and XAI's GROK4 is anticipated to enhance performance and drive demand for computing power and hardware, thereby increasing the need for optical modules [9][10]. - The scaling laws demonstrated by GROK4, which has significantly increased training volume, highlight the importance of continued investment in computing infrastructure for AI model development [9]. Future Market Expectations - The optical module market demand for 2026 is being continuously revised upwards, with expectations for 800G and 1.6T modules being adjusted significantly higher than initial forecasts [10][11]. - The overall revenue growth for the optical module industry is expected to remain robust, supported by strong demand from major cloud service providers like Meta and new entrants like Oracle and XAI [10][11]. Secondary Companies to Watch - Secondary companies such as Bochuang, Taichuang, and Xiaoguangzi are noted for their long-term potential, with Bochuang expected to achieve revenues of around 1.5 billion yuan in 2026 due to strong partnerships [13]. - Taichuang's growth is closely tied to the demand for MPO connectors, while Xiaoguangzi is leveraging its AWG chip advantages to enhance its MPU business [13]. Copper Connection Industry Insights - The copper connection industry is seeing improvements in shipment expectations, particularly for NV chains, with anticipated shipments of 30,000 to 40,000 units for GB200 and GP300 [14]. - The market is also witnessing increased attention on non-NV chain demand, driven by rising shipments from companies like Google, Amazon, and Meta [14][15]. Concerns and Future Outlook - There are concerns regarding the potential replacement of copper connections by PDFE orthogonal solutions, but current products like NVIDIA's Rubin series are expected to maintain compatibility with existing copper solutions [16][17]. - The copper cable connection market is likely to remain strong in the near term, with a longer lifecycle anticipated if alternative solutions do not meet expectations [17]. Other Notable Company Performances - Woer has shown strong performance in the high-speed line sector, with significant revenue growth expected in Q3 due to new equipment and large-scale cabinet shipments [18]. - Ding Tong Technology's communication business is experiencing growth, although its automotive segment faces challenges; however, future projects with high profit margins are expected to bolster overall performance [19][21].

Summary of the Conference Call for Shijia Photonics Industry Overview - The AI computing power demand remains optimistic, with high-frequency data showing explosive growth year-on-year and month-on-month, indicating a broad application of AI in the B-end market. The upcoming release of large models like GPT-5 is expected to catalyze the industry and enhance valuations, benefiting related stock trading strategies [2][3] - The optical module industry is experiencing significant growth opportunities, with an upward revision in the demand for 800G optical modules and a confirmed ramp-up in 1.6T optical modules. Shijia Photonics is expected to benefit from the increased production of 800G and 1.6T products and the rising penetration rate of CPU applications [2][5] Company Highlights - Shijia Photonics has acquired Fokexima, enhancing its technical strength and market competitiveness. Fokexima specializes in MPO components and holds nearly 60 patents, reporting revenue of 82.57 million yuan and a net profit of 30.68 million yuan in Q1 2025 [2][6] - Fokexima has been certified by several leading clients, including optical module manufacturers and structured cabling companies, with its 800G and 1.6T single-mode low-loss connectors already in mass production for high-speed data transmission applications [2][7][8] - The acquisition of Fokexima is expected to significantly enhance Shijia Photonics' technical capabilities and market position, particularly in the MPO component sector [6][30] Product Development and Market Trends - The optical module industry is witnessing notable trends, with a strong demand for 800G and 1.6T products. Shijia Photonics has a comprehensive layout in both passive and active products, benefiting from the ramp-up of its 800G and 1.6T products and the accelerated penetration of CPU applications [5][29] - The AWG (Arrayed Waveguide Grating) products of Shijia Photonics are competitive, with strong performance in loss metrics and leading capacity and customer response. The demand for AWG products continues to grow, covering major domestic optical modem manufacturers [4][23] - The company is also focusing on new product categories such as CW light sources and EML optical chips, which are expected to open up larger growth opportunities [5][30] Financial Performance and Future Outlook - The acquisition of Fokexima is anticipated to improve Shijia Photonics' capacity utilization and gross margin, although the specific impact is yet to be quantified. The company is adjusting its product structure to enhance the gross margin of MPO products [13][30] - The potential output value of the Thai factory, which is currently in the equipment debugging and employee training phase, is expected to be significant, although actual production value needs further enhancement [19] - The company’s MPO products are primarily multi-mode until 2024, after which there will be a gradual shift towards single-mode products, which are expected to improve gross margins [14][30] Competitive Landscape - The barriers to entry in the connector industry, particularly for MPO connectors, are primarily based on technological advancement. Fokexima has achieved mass production of products with 2 to 48 fiber holes, leading the domestic market in technology [11][12] - The company is also exploring the application of wavelength division multiplexing technology in DR optical module products, which is expected to reduce costs and meet increasing demand [24] Conclusion - Shijia Photonics is well-positioned for future growth, particularly in the AWG product line, which is expected to replace traditional filter methods. The company has achieved significant sales in MPO connectors, with a growth rate of approximately 400% in Q1 2025 compared to the previous year [29][30] - The active optical chip market is projected to reach around 15-16 billion yuan in 2025, with Shijia Photonics playing a crucial role in this growth [30]

Summary of Conference Call Records Industry Overview - The optical module market is experiencing a positive outlook, driven by the new developments and optimistic forecasts from internet cloud companies. The demand for 800G and 1.6T optical modules is expected to reach 40 million and 6-8 million units respectively by 2026, primarily due to changes in CSB manufacturers' architectures and increased market demand [1][4]. Key Companies and Their Performance - **Leading Companies**: - **Xuchuang** maintains its leading position in the market, while **Xinyi** has rapidly increased its market share, collaborating closely with major clients like Meta and Amazon. Revenue for leading companies is projected to reach RMB 36-37 billion in 2025 and RMB 44-45 billion in 2026, with significant potential for profit margin improvement [1][5]. - **Second-tier Companies**: - Companies like **Sorshi**, **LianTe Technology**, and **Cambridge Technology** are expected to capture market share, with the overall industry beta being revised upwards. If Sorshi secures over a million 800G orders, its profitability could significantly improve [6][8]. - **Domestic Leaders**: - Domestic leaders such as **Huagong Technology** and **Guangxun Technology** are set to benefit from increased capital expenditure in the domestic CS market, with strong performance anticipated in the second half of 2025 [7][8]. Market Trends and Future Expectations - The optical module market is expected to grow, with 800G module demand projected to rise from 35 million to 40 million units, and 1.6T modules from 5 million to 6-8 million units. This growth is influenced by collaborations like that between Google and OpenAI, which may further boost demand [4][12]. - The optical module jumpers market shows significant potential, with an estimated demand of 20 million units for 800G jumpers, translating to a market space worth hundreds of billions of RMB. Companies like **Taisheng Guangbo**, **Hengtong Optic-electric**, and **Aikangde** are expected to benefit from this market [9]. Technological Developments - **Meta's New Architecture**: Meta's MTIA architecture increases the demand for OSFP 800G optical modules and copper DAC connections, significantly impacting the CSP field. This architecture utilizes a large number of optical modules, which is expected to drive demand from major internet companies [13]. - **Copper Connections**: The role of copper connections in data center interconnectivity is crucial, with companies like **Credo** showing substantial revenue growth and plans to double capital expenditures, indicating a healthy market for copper connections [14]. Conclusion - The optical module industry is poised for growth, with strong demand for high-end products like 800G and 1.6T modules. The collaboration between major tech companies and the increasing capital expenditure in the domestic market are key drivers of this growth. Companies in both the leading and second-tier categories are expected to benefit significantly from these trends, making them worthy of investment consideration [12][19].

Summary of the Conference Call on Optical Module Research Industry Overview - The conference call focuses on the optical module industry, particularly the demand and pricing trends for 400G and 800G optical modules in 2025 and 2026 [2][5][10]. Key Points and Arguments 1. **800G Optical Module Demand**: The demand for 800G optical modules is in a ramp-up phase, with expectations for significant growth in 2026, projected at 35 to 38 million units, reflecting strong market demand for high-performance optical modules [4][5]. 2. **Pricing Trends**: The price of 800G optical modules has decreased by approximately 15% due to scale production, with an additional expected decline of around 10% by the end of the year. This cost optimization is crucial for manufacturers' competitiveness [2][5]. 3. **400G Optical Module Stability**: The average price of 400G optical modules remains stable, indicating a steady market for this segment [2][5]. 4. **Cloud Service Providers' Demand**: Companies like Zhongji Xuchuang are expected to achieve quarterly revenues of 50 to 60 million yuan in Q2, highlighting the urgent demand from cloud service providers for high-speed optical modules [7]. 5. **AI Computing Impact**: The explosion of AI computing is driving growth in 1.6T optical modules, with expectations for shipment volumes to double in 2026 compared to 2025. Companies that master silicon photonic integrated high-speed DSP chips will gain a market advantage [8][10]. 6. **Meta's Demand for High-Performance Modules**: Meta's data centers have a high ratio of ASIC chips to optical modules at 1.8, indicating a strong demand for high-performance optical modules. Companies like Zhongji Xuchuang and Xinyi Sheng have been certified by Meta and Google for bulk supply [9]. 7. **North American Manufacturers' Strategy**: North American manufacturers are accelerating their production lines for 800G and 1.6T modules, with market competition shifting towards cost control, delivery capabilities, and technological iteration [9][10]. Additional Important Insights - The key factors influencing market development include the capacity release rhythm of leading manufacturers and advancements in silicon photonics and next-generation technologies like CPO [3][10]. - The short-term outlook suggests that the price decline of 800G modules will enhance market penetration, while the long-term perspective indicates that 1.6T products will become a growth engine alongside the expansion of AI computing capabilities [3][10].

Summary of Key Points from Conference Call Industry Overview - The conference call primarily discusses the AI industry, public cloud services, and the renewable energy sector, with a focus on companies like Huoshan Engine, Guoneng Rixin, and Zhongji Xuchuang [2][9][13]. Core Insights and Arguments AI Industry - Huoshan Engine leads the domestic public cloud large model invocation market with a 46.4% market share [2][3]. - Daily invocation of Huoshan Engine's Daobao model increased from 4 trillion tokens in December 2024 to over 16.4 trillion tokens by May 2025, indicating rapid growth [3]. - AI tool token consumption has surged, with programming tools increasing by 8.4 times and general tools by 10 times [2][3]. - Visual understanding models in K12 education have seen a 12-fold increase in token consumption [2][3]. - Daily token consumption for intelligent inspection videos and video retrieval has surpassed 10 billion [4]. Pricing Strategy - Huoshan Engine's Daobao 1.6 pricing strategy varies by input range, significantly reducing costs for enterprises, especially for requests within the 0-32K range, where costs can drop by 63% [5]. Demand for Computing Power - The AI era is driving a shift from BI to multi-modal data processing, increasing demand for computing power [6]. - Domestic computing power is currently in short supply, with potential price increases expected in the second half of the year [21]. - Despite NVIDIA's potential return to the Chinese market, domestic computing power still has significant growth potential [21]. Renewable Energy Sector - The National Development and Reform Commission's green electricity direct supply policy benefits Guoneng Rixin and Langxin, enhancing their competitive edge in renewable energy generation efficiency [9]. - Guoneng Rixin's products and services are expected to help reduce waste in wind and solar energy generation [9]. Optical Module Market - The demand for optical modules is rapidly increasing, with expectations of 15-17 million units of 800G products needed by 2025 and optimistic projections of 25-30 million units by 2026 [13]. - Zhongji Xuchuang is highlighted as a leading player in the optical module market, with significant potential for rebound and sustained growth [13]. International Expansion and Market Dynamics - Companies like Changfei Fiber have improved their performance, with revenue and profit growth returning to levels seen in 2021 and 2022 [15][16]. - The international market is opening new opportunities, with overseas revenue exceeding 30% [16]. - The hollow fiber technology is identified as a key growth driver for Changfei Fiber, with significant investments from major players like Microsoft [17]. Other Important Insights - The AI industry is expected to see a new wave of growth if major models are upgraded in the coming months [6]. - The consumer electronics sector is anticipated to benefit from innovations in foldable screens and wearable devices, with significant sales expected [23][24]. - The electronic sector is currently facing challenges but may see valuation recovery opportunities, particularly in the consumer electronics segment [19]. This summary encapsulates the key points discussed in the conference call, highlighting the trends, opportunities, and challenges within the AI and renewable energy sectors, as well as the performance of specific companies.

Summary of Key Points from Conference Call Records Industry Overview - The conference call primarily discusses the AI and semiconductor industry, focusing on companies like Broadcom and NVIDIA, and their respective products and market performance [1][2][3][4][5][6][7][8][9]. Core Insights and Arguments Broadcom - Broadcom's AI revenue is expected to continue its growth trajectory into FY2026, benefiting from resilient AI demand [1][2]. - The Tomahawk 6 switch chip has begun mass production, supporting AI clusters with a capacity of up to one million cards, reinforcing Broadcom's leadership in the AI networking sector [2][7]. - In Q2 FY25, Broadcom's AI revenue reached $4.4 billion, accounting for 29% of total revenue, with semiconductor business revenue at 52% [7][8]. - Broadcom anticipates a significant increase in AI revenue, projecting a 60% growth rate for FY25 and FY26 [8]. NVIDIA - NVIDIA reported a Q1 FY2026 revenue of $44.1 billion, a 69% year-over-year increase, despite challenges from the H20 product line affecting gross margins [3][4]. - The company expects a median revenue of $45 billion for Q2, with a potential of $53 billion if H20-related losses are excluded [3][4]. - AI demand is driven by four key areas: post-training and data synthesis, real-time inference, sovereign AI, and industrial AI [4][5]. - NVIDIA's Chinese operations are impacted by H20 shipment issues, but there remains significant potential for domestic alternatives to fill the gap [5]. Market Trends - North America's four major cloud providers have revised their capital expenditures upward, projecting a 35.4% year-over-year increase in total capital spending for 2025 [1][9]. - The AI server, switch, and accelerator card iterations are driving demand for high-end PCB materials, with a shift towards lower dielectric constant materials [1][22]. - The light module industry is expected to see significant growth, with 800G demand projected between 32 to 35 million units and 1.6T demand expected to exceed 3 to 4 million units by 2026 [27]. Other Important Insights - The AI Ethernet switch market is anticipated to grow due to the economic and open nature of Ethernet, with Cisco and Arista Networks already achieving mass production [16][17]. - The PCB sector is experiencing a resurgence due to increased demand from AI and automotive electronics, with significant price increases noted in raw materials [20][21]. - The development of customized AI chips is expected to continue, with major players like Google and Amazon ramping up production [15]. - The overall market sentiment is shifting towards a focus on mid-tier companies with strong performance in overseas markets, indicating a potential for significant returns [29]. This summary encapsulates the key points discussed in the conference call, highlighting the performance and outlook of major players in the AI and semiconductor industry, as well as broader market trends and investment opportunities.