Essence of Brokerage Morning Meeting | High demand for computing power driving structural upgrade and value reconstruction of optical module.

Yesterday, the market hit bottom and rebounded, with the ChiNext Index rising by over 7% and the Science and Technology Innovation 50 Index soaring by 10.73%. The trading volume of the Shanghai and Shenzhen stock markets was 2.96 trillion yuan, an increase of 255 billion yuan from the previous trading day. On the market, there was rapid rotation of hot spots, with over 3100 stocks rising and over a hundred stocks hitting their limit up. In terms of sectors, the chip industry chain boomed, the PCB concept strengthened, and the CPO concept fluctuated higher. By the close, the Shanghai Composite Index rose by 1.79%, the Shenzhen Component Index rose by 4.81%, and the ChiNext Index rose by 7.05%. At today's brokerage morning meeting, Galaxy Securities believes that the demand for computing power is increasing, driving the structural upgrade and value restructuring of optical modules; CITIC SEC believes that the global boom cycle of semiconductor equipment continues to be confirmed; Huatai believes that the domestic demand for high-purity electronic-grade hydrofluoric acid is large, and the substitution of domestic materials is expected to accelerate. CITIC SEC: Continued confirmation of the global boom cycle of semiconductor equipment CITIC SEC pointed out that the global boom cycle of semiconductor equipment continues to be confirmed, focusing on price increases and overseas expansion. Currently, the global semiconductor equipment components are experiencing a rare historical price increase throughout the entire chain. The pricing power of the semiconductor industry is shifting structurally from chip terminals to equipment and component links. Component companies have small scale and high fixed costs, so price increases directly profits; at the same time, the expansion cycle of production lines lasts up to 12-18 months, with the worst supply elasticity. Emphasis is placed on the logic of domestic substitution and price increase demand brought about by the extended delivery time of overseas suppliers of valves, pipelines, ceramics, radio frequency power supplies, GAS BOX, etc. Galaxy Securities: The high demand for computing power drives the structural upgrade and value restructuring of optical modules The optical communication industry is currently undergoing a profound structural transformation driven by the explosive demand for AI computing power. The industry's prosperity has shifted from traditional cyclical fluctuations to long-term expansion channels supported by technological iterations and capital spending resonance. Major global cloud providers and AI companies continue to raise investment budgets for computing power infrastructure, directly driving non-linear growth in high-speed optical module demand. We believe that starting in 2026, the penetration rate of high-speed products in the field of data communication is accelerating, with 1.6T products entering the mass delivery cycle. The high demand on the demand side provides a solid fundamental support for the release of capacity and realization of profits in various sectors of the industry chain; with the continuous improvement of demand growth certainty, the release of capacity has also improved season by season since the beginning of the year. Gradually, Galaxy Securities believes that although the current shortage of upstream raw materials still exists, the degree of shortage may continue to narrow as the process of domestic substitution deepens. Huatai: The domestic demand for high-purity electronic-grade hydrofluoric acid is large, and domestic material substitution is expected to accelerate The scarcity and production threshold of G5-level electronic-grade hydrofluoric acid (used in wafer cleaning, wet-etching, etc.) are the highest. According to SEMI, by 2028, the mainland's 12-inch wafer production capacity is expected to exceed 3.5 million pieces per month, with a consumption of 2.5-3kg of electronic-grade hydrofluoric acid per single wafer. In 2028, the demand for hydrofluoric acid from mainland wafer factories is expected to reach 100-120,000 tons per year, with G5-level products accounting for 40-50% of total demand, resulting in a demand for G5-level products of 50-60,000 tons per year, a 30-50% increase from 2025. By the end of 2025, the effective production capacity of domestic G5-grade hydrofluoric acid was 70-100,000 tons per year. Huatai believes that the scale substitution of domestic electronic-grade hydrofluoric acid in the high-end wafer manufacturing field is expected to begin, and recommends focusing on the profit growth opportunities under the simultaneous increase in quantity and price of domestic G5-grade hydrofluoric acid. This article is reprinted from "Cailianshe". Editor: Huang Xiaodong.