--- title: "Soochow Securities Co., Ltd.: In 2025, various forms of AI hardware will accelerate implementation, optimistic about the cyclical recovery chain, self-controllable chain, AI hardware chain, and other directions" type: "News" locale: "en" url: "https://longbridge.com/en/news/243646977.md" description: "Soochow Securities Co., Ltd. released a research report indicating that 2025 will see the accelerated implementation of AI hardware, with a particular focus on the cyclical recovery chain, the self-controllable chain, and the AI hardware chain. It is expected that in the second half of the year, the consumer electronics sector will focus on Micro-LED, optical waveguides, and SiC materials. In the first quarter of 2025, the revenue of A-share listed companies in the electronics industry is expected to grow by 18% year-on-year, with net profit attributable to the parent company increasing by 30%. With the peak season approaching, the electronics industry is expected to continue its recovery, especially in the power and analog semiconductor sectors" datetime: "2025-06-09T07:10:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/243646977.md) - [en](https://longbridge.com/en/news/243646977.md) - [zh-HK](https://longbridge.com/zh-HK/news/243646977.md) generator: "portal-rs" --- # Soochow Securities Co., Ltd.: In 2025, various forms of AI hardware will accelerate implementation, optimistic about the cyclical recovery chain, self-controllable chain, AI hardware chain, and other directions According to the Zhitong Finance APP, Soochow Securities released a research report stating that from the profit perspective, considering the significant decline in electronic sector product prices over the past two years, mature process manufacturers represented by the simulation industry are expected to achieve significant improvement in profitability this year. 2025 is seen as the year of volume production for AI glasses and a turning point for the product capabilities of AR glasses. In the second half of the year, Micro-LED, optical waveguides, and SiC materials are expected to be the three major growth tracks. The electronic sector is overall rebounding from the bottom, while the logic of self-control continues to strengthen, with various forms of AI hardware expected to be launched in 2025. The report remains optimistic about the recovery chain, self-control chain, and AI hardware chain. ## Soochow Securities' main viewpoints are as follows: **Significant improvement in H1 performance, accelerated recovery in H2 peak season** In Q1 2025, the total revenue of A-share listed companies in the electronic industry was 859.5 billion yuan, a year-on-year increase of 18%; net profit attributable to the parent company was 36.6 billion yuan, a year-on-year increase of 30%. Revenue in Q1 2025, which is typically a low season, still showed growth compared to the peak season in Q4 2024, indicating a clear recovery trend. The firm believes that with the peak season in the second half of the year and the end of inventory destocking, the electronic industry is expected to continue its recovery. From the perspective of sub-sectors, power and analog semiconductors continued to recover in Q1 2025, primarily due to the downstream inventory levels having reached a low point after two years. At the same time, prices have stabilized at the bottom. Digital ICs, driven by AI demand, saw strong revenue and profit growth, with both year-on-year and quarter-on-quarter growth of around 20%. With the arrival of the traditional peak season in the second half of the year, other sectors are also expected to add recovery momentum. Additionally, the industrial and automotive sectors may also see a recovery. From the inventory perspective, in Q1 2025, the total inventory of the electronic sector was 678.7 billion yuan, a quarter-on-quarter increase of 9%, indicating a slight overall increase in inventory. From the profit perspective, considering the significant decline in electronic sector product prices over the past two years, mature process manufacturers represented by the simulation industry are expected to achieve significant improvement in profitability this year. **Consumer Electronics** In Q1 2025, shipments of smartphones/PCs and tablets exceeded expectations, with year-on-year growth of 1.5%/4.9%/8.5%, mainly due to tariff fluctuations leading to advanced procurement, while the replacement cycle for PCs was notably strong, and the domestic consumer electronics subsidy policy showed significant effects. Since the beginning of 2025, major global terminal manufacturers have launched new products, with AI becoming the core keyword for configuration upgrades. Manufacturers are accelerating the construction of AI systems and software ecosystems, using AI to break hardware barriers as a core direction. At the same time, innovations in terminal forms such as foldable PCs and desktop robots are intensifying. The AR glasses track is seeing this year as a turning point for AI + AR, with a focus on the incremental optical display segment. In 2025, multiple manufacturers including Meta, Baidu, Xiaomi, Samsung, Rokid, Thunder, and Amazon will release AI glasses and AR glasses. 2025 is seen as the year of volume production for AI glasses and a turning point for the product capabilities of AR glasses. In the second half of the year, Micro-LED, optical waveguides, and SiC materials are expected to be the three major growth tracks. **IC Design** (1) Analog: Demand/supply/inventory/price are all improving, with the industry expected to reach a turning point in 2025. On the demand side, the automotive demand for the analog sector continues to grow, but there is still expected price pressure this year. The industrial sector has completed destocking and is currently in the early stages of recovery. The communication sector (such as base stations) has experienced destocking from 2022 to 2024, and there will be a need for restocking starting in 2025 Apart from automobiles, prices for products across various fields and part numbers are expected to stabilize this year. Some part numbers have longer delivery times. Companies like 3PEAK and Naxinwei, which have a high proportion of automotive industry exposure, are likely to be core beneficiaries. (2) Storage: The cycle is starting, focus on module + customized storage opportunities. In Q2, spot prices for storage continued to rise, and Taiwanese storage manufacturers provided optimistic guidance. Nanya Technology estimates that it will clear all inventory before Q3; Winbond indicated that the company has recently received a large number of urgent orders, with strong shipping momentum in Q2. The outlook for storage Q2 performance is optimistic. The firm believes that demand for AI storage on the edge will gradually emerge in 2025 and 2026. Gigadevice, relying on its own design experience and external advanced production capacity processes, perfectly matches the demand. The implementation of industry projects in H2 2025 to 2026 is continuously catalyzing. (3) SoC: Differentiated scenarios are giving rise to differentiated IP demand, focus on NPU & ISP. Since the beginning of the year, the firm has seen various domestic SoC manufacturers fill in technology gaps and innovate, such as Hengxuan successfully developing a low-power high-performance ISP system, Richwave launching an independent NPU, and Tailin Micro completing the design of a 2.5D GPU. Each manufacturer is upgrading its technological reserves, and the core IP module self-research capabilities are breaking through. Correspondingly, on the scenario side, AI glasses chips are entering a period of intensive releases, and collaborations between AI toy chips and terminal brands are deepening. Recommended to pay attention to: Rockchip, Hengxuan Technology, Actions, Tailin Micro, etc. (4) IP & Custom Services: Self-developed chips by large manufacturers are becoming a trend, focus on IP & custom service providers. ByteDance and Alibaba have more optimistic CapEx expectations, with ByteDance's capital expenditure budget rising to 160 billion yuan in 2025, followed closely by Alibaba and Tencent. The firm expects that domestic cloud manufacturers still have ample room for CapEx increases, which is likely to drive demand growth for computing power chips. Additionally, large manufacturers are increasing their self-development efforts, and are expected to enter a high growth period, with VeriSilicon & ASR as the dual champions of AI ASIC customization welcoming a year of domestic AI. The firm believes that both GPGPU and ASIC technology routes are crucial in data center scenarios. Recommended to pay attention to: VeriSilicon, ASR, Cambricon, Haiguang Information, etc. **Equipment** (1) The growth rate of capital expenditure for fab plants is slowing down, recommend focusing on the performance of domestic testing lines and the expansion of domestic HBM. The expansion of the two storage sectors is nearing its peak, with SMIC's capital expenditure in 2025 remaining flat, and the growth rate of capital expenditure for first-tier fab plants significantly declining this year. Against the backdrop of expected absolute values for capital expenditure, the importance of increasing the localization rate of semiconductor equipment is rising, especially the performance of domestic testing lines for advanced processes. In addition, the expansion of domestic HBM also falls within expectations and is worth looking forward to. Recommended to pay attention to: ChipSource, Northern Huachuang, Weidao Nano. (2) The first year of localization for storage + logic testing machines is expected to replicate the equipment market from 23 years ago. Domestic storage testing machine leader Jingzhida and logic testing machine leader Huafeng Measurement Control are both expected to achieve verification breakthroughs this year, with market spaces for storage testing machines and logic testing machines each at 6 billion, currently with a localization rate of 0%. The first year of domestic breakthroughs for digital testing machines is expected to cover the equipment market from 23 years ago. Recommended to pay attention to: Jingzhida, Huafeng Measurement Control **Computing Power Hardware** In terms of overseas computing power, since the Spring Festival, the impact of Deepseek R1's computing power contraction, data center order cuts, and the downward revision of CoWoS order expectations have led to a significant decline in overall expectations. With CSPQ1 releasing an optimistic capital expenditure outlook and Trump abolishing the "AI Diffusion Rules," the overall expectations have been reversed. The firm remains optimistic about the growth trend of component shipments driven by the increase in GPU/ASIC production in the second half of the year. In terms of domestic computing power, the technological innovation led by Ascend continues to advance, with the successive launch of products such as the 910C/920/384 super nodes breaking the dominance of overseas manufacturers in the global computing chip market. There is optimism about the Ascend servers driving the technological iteration of domestic computing-related components and product demand. **Risk Warning:** Policy risk, intensified industry competition risk, and technology iteration risk not meeting expectations ### Related Stocks - [688220.CN](https://longbridge.com/en/quote/688220.CN.md) - [688521.CN](https://longbridge.com/en/quote/688521.CN.md) - [688049.CN](https://longbridge.com/en/quote/688049.CN.md) - [688536.CN](https://longbridge.com/en/quote/688536.CN.md) - [688200.CN](https://longbridge.com/en/quote/688200.CN.md) - [AMZN.US](https://longbridge.com/en/quote/AMZN.US.md) - [603893.CN](https://longbridge.com/en/quote/603893.CN.md) - [688608.CN](https://longbridge.com/en/quote/688608.CN.md) - [00700.HK](https://longbridge.com/en/quote/00700.HK.md) - [01810.HK](https://longbridge.com/en/quote/01810.HK.md) - [300613.CN](https://longbridge.com/en/quote/300613.CN.md) - [601555.CN](https://longbridge.com/en/quote/601555.CN.md) - [002371.CN](https://longbridge.com/en/quote/002371.CN.md) - [BYTED.NA](https://longbridge.com/en/quote/BYTED.NA.md) - [CP00062.US](https://longbridge.com/en/quote/CP00062.US.md) - [688037.CN](https://longbridge.com/en/quote/688037.CN.md) - [09888.HK](https://longbridge.com/en/quote/09888.HK.md) ## Related News & Research - [VeriSilicon reports 91% first-half revenue growth as AI orders reach 90%](https://longbridge.com/en/news/296183434.md) - [$1000 Invested In Taiwan Semiconductor 20 Years Ago Would Be Worth This Much Today](https://longbridge.com/en/news/296121990.md) - [Billionaire investor Jeff Gundlach warns of a market top as AI chips become a 'new asset class'](https://longbridge.com/en/news/296123308.md) - [China's AMEC to Invest USD520 Million to Boost Chip Equipment Capacity at Lingang Plant](https://longbridge.com/en/news/296452430.md) - [REG - CQS Natural Res - Sale of Shares from Treasury](https://longbridge.com/en/news/296374035.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**