China's AI chip market is in short supply, and the localization rate will continue to increase, benefiting leading manufacturers (Deutsche Bank)
Deutsche Bank found through expert teleconference research that China's AI chip market is currently a seller's market, and the gap between supply and demand will continue.
Deutsche Bank found through expert teleconference research that China's AI chip market is currently a seller's market, and the gap between supply and demand will continue. It is expected that the compound annual growth rate (CAGR) of domestic AI chip shipments in the next 2-3 years is expected to exceed 30%, and the localization rate will increase to more than 50%. Domestic manufacturers are divided into four echelons. Huawei and other leading manufacturers are leading in terms of computing power, but overall they still lag behind the global leading level. Customers commonly adopt multi-vendor strategies to spread risks. The market has already expected the impact of U.S. export controls, but the report reveals the strong endogenous demand in the domestic AI chip market and the accelerating trend of domestic substitution. Its growth rate and localization rate may exceed market consensus expectations. One sentence conclusion: China's AI chip market is experiencing an unprecedented "seller's market". Under the wave of domestic substitution, leading manufacturers with technology and supply chain advantages will usher in a golden development period with both volume and price rising. Good/bad: Good for the domestic AI chip industry chain, especially leading manufacturers such as Huawei Ascend, Haiguang Information, and Cambrian. The current market has expectations for the long-term trend of localization of AI chips, but it may not have enough understanding of its short-term outbreak speed and profit elasticity. Catalysts: 1) Domestic Internet and telecom operators’ AI chip procurement bidding results; 2) Domestic AI chip computing power performance test data; 3) Further changes in U.S. export control policies.