Dongxing Securities: Nuggets AI innovation cycle is optimistic about three major directions including semiconductor storage

The Zhitong Finance App learned that Dongxing Securities released a research report saying that AI logic is constantly being strengthened: ① Demand for computing power is growing rapidly. Driven by the booming development of generative artificial intelligence, the computing power industry is maintaining a high boom. ② With the rise of AI chips, the field of end-side AI is flourishing. ③ The exponential growth of AI workloads is increasing data center power requirements. The bank proposes to follow the AI innovation cycle and lay out new technologies, new demands, and new cycles to develop high-quality tracks. Looking forward to the future, the AI wave is compounded by import substitution, industry trends continue to strengthen, and the electronics industry has entered a new stage of development, and is optimistic about the direction of semiconductor storage, semiconductor testing equipment and magnetic components.

Dongxing Securities's main views are as follows:

From the beginning of the year to December 5, 2025, the Electronics Industry Index (CITIC) rose 44.67%

Driven by the wave of open source model innovation led by DeepSeek at the beginning of the year, the domestic AI big model industry was revalued, superimposed by continuous iterative upgrading of terminal-side AI applications, and the computing power industry chain showed relatively strong performance. Subsequent industrial chain innovation and terminal application recovery led by AI technology continued to drive the upward trend in the electronics industry. At the same time, 2H25 began a price increase cycle in the storage sector affected by the gap between supply and demand. From the beginning of 2025 to December 5, 2025, the Electronics Industry Index (CITIC) rose 44.67%. According to information disclosed in the 2025 Fund Quarterly Report, the total market value of the electronics industry held by Q3 funds in 2025 was 937.088 billion yuan, accounting for 5.07% of the market value of circulating A shares. The AI industry cycle combined the performance release period, and the electronics sector continued to be favored by institutional investors. The top ten companies accounting for the market capitalization/circulation market value of funds in the Q3 electronic sector in 2025 were: Maolai Optics, Lanqi Technology, Yuanjie Technology, Zhongke Fei Test, Jingchen Co., Ltd., SMIC, China Micro, Zhaoyi Innovation, Xinyuan Micro, and Stevie. High-quality semiconductor core circuit companies benefit from the resonance between the AI innovation cycle and the domestic alternative industry cycle, and institutional holdings are relatively high.

(1) Semiconductor storage

The storage industry has ushered in an upward cycle, and AI drives the imbalance between supply and demand to push prices into a super cycle. The core driving force of this upward storage cycle is the explosive demand for AI computing power infrastructure. In particular, AI servers use several times more storage than ordinary servers, driving a surge in demand for high-performance storage such as HBM, DDR5, and enterprise-grade SSDs. On the supply side, the three major original plants (Samsung, SK Hynix, and Micron) prioritize production capacity in high-profit fields such as HBM and DDR5, resulting in production capacity being squeezed for mature process products such as DDR4 for traditional servers and consumer electronics, and supply is tight. Meanwhile, global storage vendor inventory levels have fallen to historic lows. On the demand side, the popularity of AI inference applications has increased the demand for calling “cold data” and “warm data”, further driving the demand for high-capacity SSDs. QLCSSD is rapidly replacing traditional HDDs due to its high density and cost advantages. Beneficial targets: (1) storage modules: Shannon Xinchuang, Jiang Bolong, Baiwei Storage, Demingli, etc.; (2) memory chips: Zhaoyi Innovation, Lanqi Technology, Dongxin, Pran Co., Ltd., etc.

(2) Semiconductor test equipment

The development of AI computing power is driving the demand for AI chips and high-performance storage (such as HBM), significantly increasing test complexity and time, and driving the market volume and price of testing machines to rise sharply. Currently, SoC testers (accounting for 60% of the market) and storage testers (21%) are the core categories, and the global test equipment market is expected to exceed US$13.8 billion in 2025. Advanced manufacturing processes for AI chips (such as 3nm GAA), Chiplet heterogeneous integration, and HBM stacking technology require testing machines to have high channel count and high-speed signal processing capabilities, directly driving the “sharp rise in volume and price” in the testing machine market. Domestic manufacturers with core technical barriers such as high-precision measurement, efficient parallel testing capabilities, and special chips are accelerating breakthroughs in the field of high-end testing. Recommended: Jingzhida; target beneficiaries: Changchuan Technology, Huafeng Measurement and Control, etc.

(3) Magnetic components

As the power of a single AI server cabinet jumps from thousands of watts to over 100 kW, traditional AC power supply architectures face bottlenecks due to low multi-stage conversion efficiency, large space consumption, and a sharp increase in copper consumption. The Nvidia industry has switched to an 800V high voltage direct current (HVDC) architecture, and has clearly adopted SST as the 2027 mass production plan under greater power demand. The cost of magnetic components in the SST scheme accounts for about 15% to 20%. As a key device that can greatly improve the efficiency of electric energy conversion, the implementation of the SST solution is expected to accelerate the rapid growth in demand for magnetic components; in addition to the supporting demand for solid-state transformers, the computing power network is driving the increase in the scale of server magnetic components that carry computing power requirements. At the same time, efficient computing power is driving the high-end of magnetic components. Related beneficiaries: Colic, Jingquanhua, Mingpu Optoelectronics, etc.

Risk warning: Product prices fluctuate, industry sentiment declines, industry competition intensifies, and trade frictions between China and the US intensify.