CITIC Securities: The active replenishment cycle is approaching, and the basic fundamentals of special cloth will accelerate catching up.

CICC Securities research report indicates that by 2026, the demand for AI special fabrics will accelerate. The supply-demand gap for Low DK second generation and Low CTE is expected to expand to around 20%. At the same time, with the release of active replenishment demand, the price elasticity of special fabrics is expected to increase. We estimate that special fabrics account for only 0.1% of server costs, and downstream sensitivity to price increases in special fabrics is low. It is expected that by 2026, the prices of Low DK second generation and Low CTE are expected to more than double.