LUXSHARE-ICT(SZ:002475)2025-09-22 02:01Summary of Key Points from the Conference Call Industry Overview - The report focuses on the AI datacenter connectivity sectors in China, specifically highlighting copper connectors, optical transceivers, and PCBs [1][13] - The analysis identifies Luxshare, Innolight, Eoptolink, TFC, Victory Giant, and Sinoma as key players in their respective segments [1][4] Copper Connectivity - Copper solutions are expected to dominate in-rack connectivity due to their cost-effectiveness and low latency for short-reach applications [2][15] - Luxshare has experienced a 50% YoY growth in its communication segment in 1H25, contributing 9% to corporate revenue [2][22] - The company is projected to gain market share from Amphenol for the GB300 backplane copper connector, which could positively impact EPS estimates for 2026 [2][23] - Co-Packed Copper (CPC) technology is being developed to enhance performance and reduce costs in copper connectivity [24] Optical Transceivers - The demand for optical transceivers is driven by the broader adoption of ASIC chips and the need for high-speed communication in AI datacenters [3][38] - The market for Ethernet optical transceivers is projected to grow at 30-35% annually in 2025 and 2026, with AI applications increasing from 55% to 65% of the market by 2030 [38][42] - Silicon photonics (SiPh) technology is expected to capture 40% market share by 2025 and 60% by 2030, contributing to margin improvements for companies like Innolight [39][41] - Risks include geopolitical tensions and lower-than-expected ASIC adoptions, which could impact stock performance [3][64] PCB and HDI Market - The PCB market is expected to grow at 5% CAGR over the next two years, with the server/storage sector outpacing this growth at 11% CAGR [84][88] - The HDI market is projected to reach US$14B in 2025, with server demand increasing from 5% to 18% of the market [85][90] - Victory Giant Technology is expanding capacity to meet rising demand for HDI, while Sinoma benefits from the booming AI demand for PCB materials [4][84] Investment Implications - Luxshare is rated Outperform with a target price of RMB 59, reflecting its strong growth potential in the AI connectivity market [10][31] - Chroma ATE, Unimicron Technology, and Delta Electronics are also rated Outperform, indicating positive outlooks for these companies [6][7][8] Additional Insights - The global connector market is valued at approximately US$85B, with Luxshare holding a 4% market share as of 2022 [21][25] - The transition to hybrid solutions combining copper and optical technologies is anticipated to become the norm in the mid-term [16] - The PCB market is capital-intensive and cyclical, posing long-term risks despite current growth trends [4][84] This summary encapsulates the key insights and projections regarding the AI datacenter connectivity sectors, highlighting the competitive landscape and potential investment opportunities.