According to the latest industry chain order information released by Nvidia (NVDA.US) analyst Blackwell GB200 chip, Microsoft (MSFT.US) is currently the world's largest GB200 customer, with a 3-4 times increase in orders in the fourth quarter of this year, exceeding the total orders of all other cloud service providers. CITIC Securities stated that looking ahead to 2025, it is expected that domestic memory manufacturers and local wafer fabs will continue to accelerate expansion, while anticipating the high-end drive of advanced chip demand. The domestic semiconductor equipment market is expected to further improve, and equipment company orders are also expected to continue to grow. Related targets: SMIC (00981), HUA HONG SEMI (01347), Shanghai Fudan (01385).
In the report, Blackwell chip capacity expansion is expected to start in the early fourth quarter of this year, with shipments expected to be between 150,000 and 200,000 units in the fourth quarter. It is expected that the shipment volume in the first quarter of 2025 will significantly increase by 200% to 250%, reaching 500,000 to 550,000 units. This means that Nvidia may achieve its sales target of one million units in just a few quarters. Nvidia's founder and CEO Jensen Huang stated in a previous interview that the upcoming Blackwell chip has been fully put into production and the demand is &#34;crazy&#34;.
On the market front, Nvidia's stock price continues to soar, hitting a historic high again last week, with a cumulative increase of over 180% year-to-date. Despite the astonishing rise, several Wall Street institutions remain very optimistic about Nvidia's outlook. Bank of America expects Nvidia's earnings per share (EPS) for the fiscal years 2025-2026 to continue to rise by 13% to 20%, and has raised Nvidia's target price to $190. Goldman Sachs pointed out in its latest report that the launch of Blackwell and the ramp-up of production capacity are not only drivers of recent and medium-term revenue growth, but also a driving force to expand Nvidia's competitive advantage.
It is worth noting that under the global frenzy of AI layout, TSMC (TSM.US) recently announced a very strong performance report for the third quarter, &#34;boosting&#34; the entire chip sector in the global market. When talking about the demand for AI chips in the market, TSMC's leader Wei Zhejia stated at the performance conference that the outlook for AI chip demand is very optimistic, emphasizing that the demand for CoWoS advanced packaging by TSMC customers far exceeds the company's supply.
TSMC management expects the company's full-year revenue to grow by nearly 30%, exceeding the general analyst expectations of 20%-25% and the company's expectations given in the previous quarter. Management also expects that this year TSMC's data center AI server chip revenue (including Nvidia AI GPU, Broadcom AI ASIC, and other wide-ranging AI chips) will more than double.
The current demand for AI chips is incredibly strong, and it is likely to remain so for a long time to come. Recent data released by the Semiconductor Industry Association (SIA) shows that driven by the strong demand for AI chips, global semiconductor sales reached approximately $53.1 billion in August 2024, a 20.6% increase from $44 billion in August 2023, and a 3.5% increase from the already strong sales of $51.3 billion in July
Global renowned strategic consulting firm Bain predicts that as artificial intelligence (AI) technology rapidly disrupts enterprises and the economy, the market size of all AI-related sectors is expanding, reaching $990 billion by 2027. In its fifth annual &#34;Global Technology Report&#34; released on Wednesday, the consulting firm pointed out that the overall AI market size, including AI-related services and core hardware such as AI GPUs, will grow by 40% to 55% annually from the base of $185 billion last year. This means it will bring in a substantial revenue of $780 billion to $990 billion by 2027.
CITIC Securities stated that semiconductors are the primary industry strongly supported by current national policies, serving as the underlying foundation of technological innovation. In the complex and ever-changing global landscape, domestic self-controllable semiconductor production is one of the most certain development trends. Furthermore, there is still a large gap in the overall semiconductor manufacturing capacity in China, especially in the field of advanced chips, which has significant room for improvement.
Looking ahead to 2025, CITIC Securities expects domestic memory manufacturers and local wafer fabs to accelerate expansion, while anticipating the high-level drive for advanced chip demand. The domestic semiconductor equipment market is expected to further improve, with equipment companies' orders also projected to continue growing. CITIC Securities recommends paying attention to opportunities in the semiconductor sector, as it is expected to benefit from policy support, cyclical reversal, incremental innovation, and various favorable factors such as domestic substitution, potentially leading to a revaluation.
Related Concept Stocks:
SMIC (00981): SMIC stated in its performance briefing in February that under the premise of no significant changes in the external environment, the company's guidance for 2024 is: sales revenue growth not lower than the average of comparable peers, with a year-on-year growth in the single digits. The company plans to continue advancing the 12-inch factory and capacity construction plans announced in recent years in 2024, with capital expenditures expected to remain roughly flat compared to the previous year.
HUA HONG SEMI (01347): The company expects the median gross margin for the second quarter to reach 8%, continuing to improve from the first quarter. The company anticipates that equipment will start moving in September and is expected to begin trial operation in the fourth quarter of this year, with capacity expected to be released starting in 2025. Guotai Junan International pointed out that currently, HUA HONG's 2024 and 2025 EV/EBITDA valuations are 5.7x and 3.6x, making the valuation attractive. They maintain a &#34;buy&#34; rating and consider it the top pick in the semiconductor industry.
Shanghai Fudan (01385): The company has four series of products including FPGA with millions of gates, FPGA with billions of gates, FPGA with tens of billions of gates, and PSoC, with full-process independent intellectual property rights FPGA supporting EDA tools ProciseTM, making it a leading domestic programmable device chip supplier. As one of the few domestic FPGA suppliers in the industry, the company will fully benefit from the demand brought by downstream market localization, with broad development prospects

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NVIDIA's Blackwell GB200 chip orders surged, with Microsoft becoming the largest customer, leading to a 3-4 times increase in order volume. CITIC Securities predicts that the domestic semiconductor equipment market will improve, benefiting companies such as SMIC and HUA HONG SEMI. NVIDIA's stock price continues to rise, with a year-to-date increase of over 180%. Bank of America and Goldman Sachs are optimistic about NVIDIA's future prospects, expecting earnings per share to rise in the 2025-2026 fiscal year

- The article discusses the surge in demand for NVIDIA's Blackwell GB200 chips, with Microsoft being the largest customer, increasing orders significantly.  
- It highlights the optimistic outlook for the semiconductor industry, driven by AI chip demand, with TSMC reporting strong earnings and expected revenue growth.  
- Analysts predict substantial growth in the semiconductor market, with a focus on domestic manufacturers benefiting from policy support and increasing demand for advanced chips.

Hong Kong Stock Concept Tracking | NVIDIA Chip Orders Soar, Chip Industry Expected to Enter a New Growth Cycle (List of Concept Stocks)