Core Insights - Oracle and AMD are expanding their long-term partnership to enhance AI capabilities, with Oracle's cloud infrastructure set to deploy a significant AI supercluster powered by AMD's Instinct MI450 series GPUs starting in Q3 2026 [9][10]. Group 1: AI Supercluster Details - The AI supercluster will initially deploy 50,000 Altair GPU slots, with plans for gradual expansion in 2027 and beyond [6][9]. - The MI450 GPU is expected to deliver approximately 40 petaflops of peak computing power with 432 GB of HBM4 memory and a memory bandwidth of 19.6 TB/s [2][11]. - The Helios rack design will support up to 128 MI450X GPUs, providing a total of 1.45 exaflops at FP8 precision and 2.9 exaflops at FP4 precision [5][10]. Group 2: Technical Specifications - The MI450 series will utilize TSMC's 2nm process technology, enhancing performance and efficiency [2]. - Each Helios rack will feature advanced networking capabilities, including UALink for GPU interconnectivity and Pensando DPU technology for enhanced security and performance [12][14]. - The architecture is designed to optimize performance density, cost, and energy efficiency, crucial for large-scale AI operations [12][13]. Group 3: Market Context and Future Outlook - The demand for large-scale AI capacity is accelerating, necessitating flexible and open computing solutions [10]. - Oracle's Acceleron network architecture aims to reduce equipment layers in large-scale AI deployments, indicating a strategic move towards more integrated solutions [7][11]. - The anticipated total cost for the deployment of 700 racks is estimated to be between $3.5 billion and $4 billion, reflecting the high demand and limited supply of GPUs [6][7].

Investment Rating - The report maintains an "Outperform" rating for the communication industry, indicating an expected performance exceeding the benchmark index by more than 10% [1][41]. Core Insights - AMD has launched the MI350 series GPUs and showcased plans for the MI400 series, intensifying competition among the "AI Triad" in North America [2][14]. - The data center AI accelerator market is projected to grow over 60% annually, reaching $500 billion by 2028, with inference market growth expected to outpace training [2][14]. - The report highlights the ongoing valuation recovery in the overseas computing chain, driven by improved earnings confidence for 2026 and a return of value funds [3][15]. - The GTC Paris summit emphasized the importance of sovereign AI and industrial cloud as significant growth areas for computing power in Europe [4][15]. - The report suggests focusing on companies within the computing power supply chain, particularly in edge computing and endpoint devices [5][16]. Summary by Sections Industry Dynamics - AMD's MI350 series features 185 billion transistors and 288GB HBM3e, with performance improvements over the MI300 series exceeding 100% [2][14]. - The MI350X and MI355X GPUs demonstrate up to 35 times the inference performance of the MI300X [2][14]. - The report notes that the European market is becoming a key area for AI deployment, with significant investments in sovereign AI systems [4][15]. Mergers and Acquisitions - East Mountain Precision announced plans to acquire Source Photonics for up to $629 million, indicating a trend of consolidation in the optical communication sector [5][16][17]. - Source Photonics reported a revenue of 2.93 billion and a net profit of 400 million for 2024, with a 32% year-on-year growth in Q1 revenue [7][17]. Market Performance - The overall market saw a decline during the week of June 9-13, 2025, with the communication index dropping by 0.78% [8][18]. - The optical module sector showed resilience with a weekly increase of 3.12%, indicating strong performance amidst broader market challenges [8][18].