2026-03-04 02:40Summary of Key Points from the Conference Call Industry Focus - The conference call primarily focused on the artificial intelligence (AI) network sector, particularly the co-packaged optics market trends, and the global printed circuit board (PCB) / copper clad laminate (CCL) industry dynamics, including supply-demand patterns and competitive landscape [1][2] Core Insights and Arguments Artificial Intelligence Network Sector - Investors are particularly interested in the supply-demand dynamics of optical modules and the trends in co-packaged optics technology [1] - The AI data center market is viewed positively by most investors, who see it as a long-term growth opportunity for optical communication companies, driven by increased capital expenditures from global cloud service providers and the technological upgrade from 800G to 1.6T [2] - Some investors express uncertainty about the development trends of co-packaged optics, questioning whether this technology will disrupt the business models of optical module companies [2] - Nomura suggests that co-packaged optics may become a competitive solution in horizontal network expansions, while pluggable optical modules will maintain a longer lifecycle due to lower implementation difficulty and a more mature supply chain [2] - Key component companies benefiting from the high entry barriers in the co-packaged optics field include Corning and Lumentum, particularly in the fiber optics and high-power laser sectors [2] - Japanese companies such as Fujikura, Sumitomo Electric, and the unlisted Xuan Guang Advanced Components are highlighted as having potential opportunities in the global co-packaged optics supply chain [2] Printed Circuit Board / Copper Clad Laminate Industry - Investors are keen to understand the successful development experiences of Chinese AI PCB / CCL companies over the past 2-3 years, while also expressing concerns about the sustainability of current demand growth and potential overcapacity risks [3] - Nomura believes that continuous technological innovation from graphics processing units (GPUs) and application-specific integrated circuits (ASICs) will support material and product upgrades in 2026 and 2027, potentially accelerating the industry into an upgrade cycle starting in the second half of 2026 [3] - Supply shortages of key raw materials such as glass fiber, copper foil, and resins, as well as equipment like laser drilling machines, are expected to persist, allowing leading PCB / CCL companies to maintain their competitive edge through more efficient supply chain management [3] - The competitive landscape in the high-density interconnect PCB sector is viewed as more favorable compared to the high-layer PCB sector, with the CCL industry exhibiting a higher concentration than the PCB industry [3] - Core recommended stocks include Shenghong Technology and Shengyi Technology, with Shengyi being a leading CCL supplier in China and Shenghong serving as a high-density interconnect PCB supplier for NVIDIA [3] Concerns Regarding Japanese Suppliers - Some investors are worried that Japanese upstream suppliers are adopting a conservative approach to capacity expansion, while their Chinese counterparts are more aggressive, potentially allowing Chinese companies to capture market share and impact the high-profit business of Japanese firms [4] Software Sector Insights - Most investors currently hold a negative view of the software sector, primarily due to concerns that large language models (LLMs) and open AI agents will disrupt the software industry [5] - Nomura agrees with this sentiment, indicating that valuation pressures in the software sector will persist in the short term due to a weak macro environment and intense competition, with many Chinese software companies facing growth challenges [5] - Despite the negative outlook, Nomura believes that a clear trend of differentiation will emerge within the software industry, where companies that integrate deeply into business processes and leverage LLMs and AI technologies to provide smarter solutions will thrive and not be disrupted [5]