December 15, 2025 09:00 PM GMT Greater China Semiconductors | Asia Pacific Getting tighter for cloud semis: We noted that AMD (covered by Joe Moore) sees an 18% CAGR for data center CPU demand in 2025-2030e (link), and Aspeed raised its server TAM growth projection to 6-8% over the next few years (link). To prepare for strong demand ahead, we believe top CSPs are trying to secure sufficient capacity for key cloud semis components into year-end, with LTA discussions even on logic components. Positive for clo ...

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Greater China Semiconductors, specifically focusing on Cloud Semiconductors (CSPs) in China and the US - **Market Sentiment**: The overall view on the cloud semiconductor industry is attractive, with a bullish outlook on AI investments and cloud infrastructure spending [8][10][12] Core Insights - **China CSPs Capex**: The big three China CSPs reported a combined capital expenditure (capex) of Rmb62 billion in 2Q25, reflecting a 12% increase quarter-over-quarter (Q/Q) and a 170% increase year-over-year (Y/Y) [10] - **Alibaba's Performance**: Alibaba (BABA) showed the most significant upside among China CSPs, with a 2Q25 capex of Rmb38.7 billion, marking a 57% increase Q/Q and a 224% increase Y/Y. Their investments in AI are yielding tangible results, contributing to a 26% Y/Y growth in Cloud Intelligence Group revenue [4][10][11] - **US Demand**: Demand from US CSPs remains strong, with expectations for continued growth into the second half of the year. However, component shortages may delay some orders into 1Q26 [6][10] Investment Trends - **AI Investment**: There is a strong emphasis on AI investments across the board, with companies like Tencent and Baidu also increasing their spending while being cautious about supply chain uncertainties [4][11] - **Local Chip Supply**: GDS noted that while local chip supply is an option, it may come with higher costs and less efficiency compared to imported chips. The need for performance and technology remains a critical consideration for customers [5][10] Market Dynamics - **Cloud Capex Growth**: The overall cloud capex is expected to grow by 56% Y/Y in 2025, up from a previous forecast of 44%. This growth is driven by major players like Amazon, Microsoft, and Alphabet [14][17] - **Capital Intensity**: The capital intensity for cloud providers is projected to exceed 18%, indicating a new all-time high, with expectations that it will account for more than 20% of revenue in 2026 [17][20] Additional Insights - **Strategic Partnerships**: Alibaba has entered a strategic partnership with SAP to enhance cloud and AI services, indicating a trend towards collaboration in the tech space [11] - **Market Uncertainty**: Despite the bullish outlook, there are concerns regarding chip supply uncertainties, which could impact AI demand and cloud service capabilities in the short term [11][10] Conclusion - The conference call highlighted a robust growth trajectory for cloud semiconductors in both China and the US, driven by significant investments in AI and cloud infrastructure. However, supply chain challenges and the need for strategic partnerships remain critical factors to monitor in the coming quarters [10][11][12]