At present, the major A-share indices are in a period of shock and consolidation, the market divergence is more obvious, and the index rebounds and fluctuates. Under the influence of uncertain factors, the overall cautious mood of the market is strong, and the enthusiasm of funds to go long has declined.

Some analysts said that in the current market environment, it is recommended that investors see more and move less, and investors with lower positions can pay attention to the main line of science and technology with good performance and independent and controllable themes, among them, semiconductors, computing power and other sectors can be appropriately allocated.

Drafting: Qing Zixiu

1. Semiconductors: Localization rate or accelerated evolution

Recently, the "reciprocal tariffs" initiated by the United States have continued to attract market attention, and in this context, the independent and controllable expectations of the domestic semiconductor industry chain continue to strengthen. At the same time, some manufacturers released first-quarter performance forecasts, showing that the marginal recovery trend of segmentation is obvious.

Fang Jing, an analyst at Minsheng Securities, said that this trade friction is qualitatively different from the previous one, and it is now necessary to strengthen confidence and increase independent and controllable allocation exposure. At the same time, China's semiconductor industry has also made great progress since the trade dispute in 2018, and the tariff policy is expected to further accelerate the increase in the localization rate. Tianfeng Securities pointed out that in the short term, U.S. chip manufacturers may fall into a supply adjustment period due to the surge in costs, causing a phased shortage of key components; In the long run, the cost advantage of US IDM companies in the Chinese market will be significantly weakened, which is expected to create structural replacement opportunities for local semiconductor companies. High trade barriers have accelerated the regionalization and restructuring of the electronics industry chain. On the one hand, China's semiconductor autonomy process is accelerating, and local alternative spaces in US-dominated fields such as analog chips, RF modules, and on-board storage are opened, and domestic manufacturers with technical reserves are expected to break through. On the other hand, the trend of regionalization of the supply chain is highlighted, the demand for local manufacturing is upgraded, the cost performance of local IC is highlighted under the new tariff system of wafer foundry, and the demand for domestic advanced packaging at the packaging and testing end is growing, promoting the regional layout of the industrial chain. This dual-track model of "local high-end substitution + low-end relocation" has become a key strategy to deal with de-globalization.

At present, the global semiconductor capital expenditure is picking up, the downstream demand is increasing, and the overall demand and performance of the semiconductor industry are improving. Yang Zhong, an analyst at Huafu Securities, pointed out that in terms of the localization process, the autonomy rate of China's semiconductor industry has increased year by year, from 14% in 2012 to 18% in 2022, and is expected to reach 26.6% in 2027. Benefiting from the above-mentioned trends such as the rise of the semiconductor boom, the iterative upgrading of manufacturing technology and the accelerated evolution of the localization rate, domestic semiconductor equipment manufacturers are expected to continue to benefit from the expansion of the semiconductor market scale and the deepening of the localization rate by relying on their own product competitiveness and category expansion capabilities, and the growth rate and space may be very significant.

Gao Feng, an analyst at China Galaxy Securities, pointed out that companies that rely on the U.S. market will face pressure, but in the long run, the impact of tariffs may bring about the postponement of downstream demand recovery and the cancellation of related orders.

In terms of individual stocks, independent and controllable direction, domestic semiconductor manufacturing leader, RF and analog IC listed companies SMIC, North Huachuang, China Micro Corporation, Tuojing Technology, Shengbang Co., Ltd., Changhong Technology, NOVOSENSE Micro, Zhuosheng Micro, Weijie Chuangxin, Zhengfan Technology, MayAir Technology, etc. are generally optimistic about the industry.

Potential stocks: SMIC (688981), AMEC (688012), Tuojing Technology (688072), Shengbang (300661), Changhong Technology (300151).

2. Computing power: high demand brings high prosperity

This year's "Government Work Report" proposes to continue to promote the "artificial intelligence +" action. On March 25, the media briefing on the achievements of the central enterprises "artificial intelligence +" came to the news, and the management held the "AI+" special promotion meeting for two consecutive years, introduced special support policies, carried out special training on artificial intelligence, and continued to deepen the "AI+" special action of central enterprises. In the next step, we will continue to deepen the "AI+" special action, give more prominence to application piloting, data empowerment, and intelligent computing to build a foundation, target high-value scenarios with strong strategic significance, high economic returns, and close relevance to people's livelihood, strengthen industry collaboration, expand open cooperation, and increase layout.

Some industry analysts believe that in the context of the country's continuous increase in the development of the artificial intelligence industry, the demand for computing power remains high. In terms of subdivisions, it is recommended to pay attention to servers, optical modules, and liquid cooling sectors driven by the development of AI at home and abroad.

In the past two years, the world has been in the explosive stage of AIGC, and the completion of ultra-large data centers to provide high-capacity, high-performance data storage and processing services has accelerated, driving the steady development of the industry. Some industry insiders pointed out that in 2024, driven by the sharp rise in demand for AI servers, the global server industry will expand rapidly, and it is expected that the annual shipment volume will increase by 20% year-on-year.

It can be seen that the development of AI servers is closely related to the demand and progress of AI technology. From the specialization of hardware to the combination of cloud computing and edge computing, from the upgrade of data centers to the exploration of quantum computing, AI servers are constantly developing in the direction of more efficient and powerful. With the deepening of AI applications, the technological innovation and market demand for AI servers are expected to continue to grow, driving the widespread application of AI. Some market organizations predict that AI servers will maintain a triple-digit annual growth rate, and shipments are expected to account for more than half of the overall server shipments in 2025. It is recommended to pay attention to the Industrial Fortune Union, Sugon, Inspur Information, Huaqin Technology, Unisplendour, etc.

The development of AI data centers accelerates the development and application of high-speed optical modules, and the evolution of optical modules from 800G to 1.6T is accelerated. Zhang Zhenzhen, an analyst at Guojin Securities, pointed out that AI drives the iteration speed of optical modules, and 1.6T optical modules will start to be shipped in batches in the fourth quarter of 2024 and officially increased in the first quarter of 2025. Overseas cloud vendors continue to increase capital expenditure in the direction of AI, and have made it clear that capital expenditure will continue to grow in 2025, which is good for the optical module sector, and the growth of the sector continues to be highlighted. In terms of individual stocks, Zhongji Innolight, Xinyisheng, Tianfu Communication, Accelink Technology, Huagong Technology, Yuanjie Technology, etc. are generally optimistic about industry institutions.

According to IDC data, China's liquid-cooled server market will reach US$1.26 billion in the first half of 2024, a year-on-year increase of 98.3%, and it is expected that China's liquid-cooled server market will reach US$10.2 billion in 2028, with a compound annual growth rate of 47.6%. With the increase in power consumption of computer rooms driven by AI computing power, the necessity of using higher value liquid cooling for heat dissipation has increased, and the volume and price of the temperature control market have risen. Wu Tingting, an analyst at Shanghai Securities, pointed out that AI computing power continues to boom, and the liquid cooling market has a broad space.