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China AI Network: Scale-up technology is the core of domestic super nodes and benefits from the interconnected supply chain (Morgan Stanley)

2026-07-29·ima-daily5min-0729-30-7db225dcee

Street Signal | China AI Network: Scale-up technology is the core of domestic super nodes and benefits from the interconnected supply chain (Morgan Stanley)

A Morgan Stanley report pointed out that China's AI computing market is shifting from single-chip specification competition to system-level super-node solutions due to limitations in chip-level processes.

Domestic manufacturers such as Huawei and Biren use proprietary scale-up technology to achieve super nodes with an accelerator scale of 64 to 1024, and cross-cabinet expansion drives the demand for optical interconnection.

The report believes that Montage relies on PCIe retiming and switching chips, and domestic GPU manufacturers such as Haiguang and Cambrian have benefited from scale-up to improve rack performance. The market has previously focused more on single-chip computing power, but this report points out that system-level network architecture is the key bottleneck.

The implication of the potential transaction is that it is highlights to pay attention to PCIe and optical engine suppliers in the Internet supply chain, as well as Chinese AI GPU ecological enterprises that promote scale-up technology.

One sentence conclusion: With China's AI chips restricted, Scale-up network technology has become the key to improving computing power systems, and supply chain links such as PCIe and optical interconnection will usher in deterministic growth opportunities.

Positive/negative: Positive for Montage Technology (Montage, 688008.SH), Haiguang Information (688041.SH), and Cambrian (688256.SH). The current market pays great attention to AI chips, but there is insufficient recognition of the importance of supporting Internet technology, and the value of these supply chain links has not yet been fully priced. Catalysts:

1) AI capital expenditure plans of Chinese CSPs (Alibaba, Tencent, etc.);

2) Release and test results of domestic AI GPU super node solutions;

3) Order and shipment data of PCIe and optical interconnect related products.

Full text

China AI Network: Scale-up technology is the core of domestic super nodes and benefits from the interconnected supply chain (Morgan Stanley)

A Morgan Stanley report pointed out that China's AI computing market is shifting from single-chip specification competition to system-level super-node solutions due to limitations in chip-level processes. Domestic manufacturers such as Huawei and Biren use proprietary scale-up technology to achieve super nodes with an accelerator scale of 64 to 1024, and cross-cabinet expansion drives the demand for optical interconnection. The report believes that Montage relies on PCIe retiming and switching chips, and domestic GPU manufacturers such as Haiguang and Cambrian have benefited from scale-up to improve rack performance. The market has previously focused more on single-chip computing power, but this report points out that system-level network architecture is the key bottleneck. The implication of the potential transaction is that it is highlights to pay attention to PCIe and optical engine suppliers in the Internet supply chain, as well as Chinese AI GPU ecological enterprises that promote scale-up technology. One sentence conclusion: With China's AI chips restricted, Scale-up network technology has become the key to improving computing power systems, and supply chain links such as PCIe and optical interconnection will usher in deterministic growth opportunities. Positive/negative: Positive for Montage Technology (Montage, 688008.SH), Haiguang Information (688041.SH), and Cambrian (688256.SH). The current market pays great attention to AI chips, but there is insufficient recognition of the importance of supporting Internet technology, and the value of these supply chain links has not yet been fully priced. Catalysts: 1) AI capital expenditure plans of Chinese CSPs (Alibaba, Tencent, etc.); 2) Release and test results of domestic AI GPU super node solutions; 3) Order and shipment data of PCIe and optical interconnect related products.

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