Nvidia(US:NVDA)2025-10-27 00:31Summary of Conference Call Notes Industry Overview - The conference call primarily discusses the supply chain and production capacity related to advanced materials used in AI servers, particularly focusing on M9 and M8 materials, which are critical for companies like Nvidia and their upcoming Robin servers [1][2][4]. Key Points and Arguments 1. Material Selection for AI Servers - Nvidia has confirmed the use of M9 materials for its Robin servers, with some components potentially using M8 due to shortages of third-generation glass cloth [1][2][4]. 2. Supply Chain Dynamics - Major suppliers for the materials include companies from Japan and the USA, with domestic suppliers like Shui Li Hua gradually increasing production capacity [1][5]. - The monthly production capacity for Q materials is expected to rise from tens of thousands of meters to approximately 1 million meters by 2026, although supply may still fall short of demand [1][6]. 3. Pricing Trends - The unit value of M9 floating boards ranges from 1,000 to 1,500 RMB per piece, significantly higher than M6, which is priced at 400 to 500 RMB [7][8]. - The cost of raw materials such as resin, glass cloth, and copper foil is expected to increase, indicating potential for further price hikes in the future [8]. 4. Demand Forecast - The majority of fabric demand in 2026 will be driven by Robin's AI servers, with expected monthly demand of around 1 million meters, primarily from Nvidia, Google, and Amazon [9][11]. - CPX and desktop versions are anticipated to see significant demand increases in Q3 of 2026 [10]. 5. Production Capacity and Quality - The production capacity for second-generation glass fiber cloth is currently about 1 million meters per month, expected to reach 3 million meters by next year, although quality improvements are progressing slowly [14]. - The expected doubling of Q cloth production to 2 million meters by the end of 2026, and further to 3 million meters by 2027, is noted, with prices remaining stable due to high demand [32]. 6. Impact of Material Hardness on Production - The hardness of Q materials, which contain pure silicon, is expected to significantly reduce the lifespan of PCB drilling needles, leading to a projected increase in laser drilling machine usage by 30% to 50% [22][23]. 7. Market Share and Competition - Currently, Taiguang holds about 50% of the M9 market share, with other competitors like Dou Shan and Sheng Yi having smaller shares [25]. - By 2026, domestic suppliers are expected to capture 50% to 60% of the Q material market share, up from 20% to 30% currently dominated by Japanese firms [31]. 8. Future Material Usage by Competitors - Google and Meta are expected to lag behind Nvidia in adopting M9 materials, with evaluations starting in the second half of 2026 [3][11]. - Amazon plans to use a combination of first-generation glass fiber cloth with HVLP4, while Google and Meta are considering M8 or M9 materials for their next-generation chips [17]. Additional Important Insights - The partnership between Taiguang and Feili Hua involves a supply agreement based on Nvidia's certification data, indicating strategic collaborations to secure material supply [13]. - The anticipated price increases for copper foil due to potential hikes from Japanese suppliers could affect overall material costs in the coming quarters [18]. - The transition from second to fourth generation materials is expected to incur a production loss of about 20%, highlighting the challenges in scaling up production while maintaining quality [20]. - The current market dynamics suggest that while prices may stabilize, the ongoing demand from major tech companies will keep the supply chain under pressure [32].