It still has to be AI.
Today, the Copper Cable High-Speed Connection Sector had a major breakout, with nine stocks in the sector hitting the daily limit.
As of the time of publication, Kingsignal Technology and Broadex Technologies both reached their daily limit at 20CM, Zhejiang Zhaolong Interconnect Technology surged over 17%, Ruikeda increased over 16%, T&S Communications and Dongguan Dingtong Precision Metal Co.,Ltd. rose over 11%.
Roshow Technology had three limit ups in the last five days, Baosheng Science And Technology Innovation, Shenzhen Deren Electronic, and Nanjing Huamai Technology had three limit ups in six days, Anhui Xinke New Materials, Shenzhen Woer Heat-shrinkable Material, and Dongguan Mentech Optical & Magnetic hit the daily limit, Fujifilm Holdings Corporation Unsponsored ADR increased over 9%.
Since the beginning of this year, there have been quite a few stocks in the Copper Cable High-Speed Connection Sector whose prices have doubled.
Among them, Shenyu Communication Technology Inc. has risen over 344%, Shenzhen Woer Heat-shrinkable Material over 284%, Zhejiang Zhaolong Interconnect Technology over 128%, Tongling Jingda Special Magnet Wire over 104%, T&S Communications over 95%, Anhui Xinke New Materials over 93%, and Huafeng Technology over 83%.
The shipment volume of GB200 is about to increase significantly.
Analysis suggests that the recent surge in high-speed copper cable connections may be attributed to the following factors:
First, the impact of the US stock market; Broadcom's significant rise has created a marginal effect.
At the same time, in the previous few trading days, the stock price of the US copper cable high-speed connection giant Amphenol (APH) recently reached a historic high, peaking at $75.614 per share.
Since the beginning of this year, Amphenol has accumulated a rise of over 45%, with the latest total market capitalization at $86.394 billion.
Second, excellent large models such as "Doubag" and "Koling" in China have begun attempts at commercialization, with giants like ByteDance, Tencent, and Xiaomi planning to make significant investments in AI.
According to media reports, Xiaomi is working on building its own GPU cluster for AI large models.
Lei Jun stated: "In the matter of AI hardware, the core is mobile phones, not glasses. It is impossible for Xiaomi not to go 'all in' in this field."
There are also reports that ByteDance plans to invest 160 billion in computing power.
Thirdly, NVIDIA's GB200 is about to ramp up production, leading to a surge in demand for high-speed copper cables.
At the 2024 GTC conference, NVIDIA announced the GB200 NVL72 cabinet architecture, utilizing NVLink full connectivity, with over 5000 copper cables.
According to calculations by China Merchants Securities, the internal wiring value (including connectors) of a single NVL72 cabinet is 0.65 million yuan, while the internal wiring value of a single NVL36 cabinet (including connectors) is equivalent to half at 0.325 million yuan, thus the copper connection market increment brought by GB200 is approximately 22.8 billion yuan.
It is understood that GB200 began shipping in November, and is expected to ramp up in the first quarter of next year, with the subsequent product cycle likely to accelerate, leading to an explosive growth in demand for copper cables alongside GB200 shipments.
The advantages of copper cable connections are evident.
Data shows that servers have various connection solutions, including optical cables (AOC), passive copper cables (DAC), and active copper cables (ACC).
With the improvement of computing power and communication bandwidth, the energy consumption of a single cabinet in data centers is growing exponentially, while the use of Copper cables can alleviate power consumption increases, showing significant cost advantages.
The manufacturing process of Copper cables is complex, and the industry chain manufacturers mainly include core wire suppliers, finished wire suppliers, and harness suppliers, with domestic manufacturers including Shenzhen Woer Heat-shrinkable Material, Luxshare Precision Industry, Zhejiang Zhaolong Interconnect Technology, Shenyu Communication Technology Inc., Kingsignal Technology, and others.
Looking ahead, with the development of technology, AI will penetrate into all aspects of life just like the Internet does today.
To not miss this wave, top companies both domestically and internationally are increasing their investments, and companies within the related industry chain are expected to benefit.
Sealand believes that large model training drives growth in AI computing power demand, new generation computing architectures like GB200 will be launched, and segments within the computing industry chain such as AI Chips, Server, Copper connections, HBM, liquid cooling, optical modules, IDC and others are expected to continue benefiting. Suggested focuses include:
2) Server whole machine: Foxconn Industrial Internet, Inspur Electronic Information Industry, Dawning Information Industry, Nanjing Huamai Technology, China Greatwall Technology Group, Chengdu Hi-Tech Development, Digital China Group, Fiberhome Telecommunication Technologies, Talkweb Information System, Wistron, Quanta, Inventec, WUYI, Super Micro Computer.
3) Server components: ① Heat dissipation: Shenzhen FRD Science & Technology, Dawning Information Industry, Shenzhen Envicool Technology, Tsinghua Tongfang, Shennan Circuits, Guangzhou Goaland Energy Conservation Tech, Qihong Technology, Shuanghong, VERTIV; ② Mainboard: Wus Printed Circuit, Shennan Circuits, Victory Giant Technology, Gigabyte, ASRock; ③ HBM: SK Hynix, Samsung, Micron, Suzhou Secote Precision Electronic, Novoray Corporation; ④ Copper connection: Amphenol, Shenzhen Woer Heat-shrinkable Material.
4) Optical module: Suzhou TFC Optical Communication, Zhongji Innolight.
5) Datacenter: Guangdong Aofei Data Technology, Beijing Sinnet Technology, Shanghai Baosight Software, Shanghai AtHub, CETC Digital Technology.
