Donghai Securities: The electronics industry is expected to continue to pay upward attention to segmented tracks such as AI servers, end sides, and equipment materials in the first half of 2026

The Zhitong Finance App learned that Donghai Securities released a research report saying that the electronics industry's probable cycle will continue to improve in the first half of 2026, and structural growth opportunities will still be on segmented tracks such as AI servers, AI end sides, and equipment materials; in the second half of 2026, we need to pay close attention to fluctuations in storage prices, the persistence of high AI investment and high growth, and the continuation of demand recovery.

The main views of Donghai Securities are as follows:

Currently, the overall cycle of the semiconductor industry is improving, and the industry structure is dominated by high growth in segments such as AI, storage, and equipment

The first half of 2026 is likely to continue the high structural growth trend. In the second half of the year, we need to focus on the strength of demand recovery and policy stimulus. The global semiconductor industry cycle continues to maintain a slow upward pattern. The demand side is dominated by high growth in industries such as AI servers, AI end side, smart wearables, new energy vehicles, and robots, driving the growth in semiconductor demand. Global semiconductor product sales from January to October 2025 were 21.19% year-on-year, and the silicon wafer shipping area was 4.99% year-on-year in 2025Q1-Q3. The overall trend of silicon wafer sales continued to rise in 2025. Looking at product prices, the bottom of most products fluctuated and rebounded. The price of storage modules that are more sensitive to terminal demand has increased by 140-600% since 2025, and the price increase of memory chips has ranged between 50-700%. The mismatch between storage supply and demand is likely to continue until the first half of 2026. In terms of inventory, the inventory levels of the world's leading brands for CPUs, storage, simulation, and MCUs are generally at historically high levels. Beginning in 2025Q2, inventory levels are healthy and reasonable; domestic companies' inventory levels are relatively healthy compared to revenue. On the supply side, the short-term operating rate of wafer factories has increased, around 90% overall; semiconductor equipment purchases have grown rapidly, and production capacity expansion has remained stable within 1-2 years. Overall, the bank believes that the industry is currently in a process of high structural growth, with high growth in AI, storage, equipment and other industries. It is likely that the structural recovery trend will continue in the first half of 2026. Later, it is necessary to pay close attention to changes in storage prices, continuous investment in AI, and the continuing strength of demand recovery.

In 2025, AI will show full resonance from the cloud server to the end side

There may be differences in AI in the short term, such as overinvestment, but the long-term rapid growth trend is unquestionable, and it is possible to continue to focus on industry chain opportunities such as AI servers and AI end-side applications over a long period of time. With the introduction of ChatGPT around the world, AI has entered a new stage of development. The rapid growth of the AI industry has led to the rapid development of many upstream industries such as computing power chips, optical modules, PCBs, and high-end storage. Some enterprises in China are fully enjoying the dividends of the rapid development of the AI era and the accelerated development of domestic alternatives. There are differences that AI investment is overheated around the world in the short term, but the long-term growth trend has not changed. The rapid development of AI in the cloud is also driving innovation on the end side. AI empowers new products, drives component upgrades, and AIOT has entered a stage where innovation and iteration can continue. The bank believes that in the long run, AI not only brings cost reduction and efficiency to production and life, but also brings new feelings, experiences, and convenience to life, creating many new needs. It is recommended to focus on long-term development opportunities on the AI server and AI side.

Facing the pressure of overseas market regulation, China's determination to accelerate the development of China's semiconductor industry is unwavering

The acceleration of the localization process is even more inseparable from the upgrading of upstream equipment, components, and materials, and China's upstream industrial chain may usher in opportunities for accelerated development. China is currently the economy with the largest production capacity of wafers in the world. Every year, new wafers also remain at the top of the world. The rate of expansion of China's fab plants may continue to grow at a high rate within the next 10 years. The development of China's semiconductor industry is related to the speed of long-term core technological progress. Especially in the era of rapid AI advancements, AI and semiconductor technology are even more needed to improve China's long-term productivity level. However, in recent years, it has been regulated by overseas economies on semiconductors. Objectively speaking, there is a big gap between the upstream core industrial chain links and overseas, and the degree of localization still has a lot of room for development. The bank believes that the pace of semiconductor progress in China is unwavering. As time is accumulated, the degree of localization of upstream equipment, components, and materials will continue to increase and accelerate development, and related enterprises will also benefit from the continuous progress and development of China's semiconductor industry.

Main line 1: AI server - computing power chip+optical module+optical chip+PCB+storage+CPU+liquid cooling

Reasons: (1) Demand for AI models surged after the launch, and large capital expenses were spent on AI server construction; (2) the scale of the AI industry and AI servers may continue to grow rapidly in the next 5 years; (3) China's AI server industry chain enterprises will benefit not only from the rapid development of the global AI industry, but also from the accelerated dividends of domestic substitution.

Focus: Computing power chips (Cambrian, Moorish threads), optical modules (Zhongji Xuchuang, Guangxun Technology, Xinyisheng, Tianfu Communications), optical chips (Yuanjie Technology, Changguang Huaxin), PCB (Shenghong Technology, Shanghai Electric Power Co., Ltd., Shennan Circuit, Shengyi Technology, Dongshan Precision), storage (Lanqi Technology, Jiang Bolong, Demingli, Baiwei Storage, Zhaoyi Innovation, Beijing Junzheng), CPU (Haiguang Information, Longxin Zhongke), liquid cooling (Yingwei, Zhongxin Zhongke), liquid cooling (Invek, Zhongshi Rong Technology) (Da, Siquan New Materials).

Main line 2: AI end side - Wi-Fi, Bluetooth, SoC, video chips related to the AIoT industry

Reason: (1) AI products from the cloud to the consumer end have been launched one after another. AIPC and AI phones are connected to large models on the cloud, and the end side realizes some local AI computation and drives the growth of components such as computing power chips; (2) AI supports TWS headsets, smart watches, and smart homes to drive new product consumption, and component volume and price increases; (3) AI glasses, AI robots and other products in AI end side applications are introduced one after another. In the future, as AI technology continues to infiltrate and more innovative technological products enter life, the entire upstream industry chain will continue to benefit.

Follow: Lexin Technology, Hengxuan Technology, Ruixin Micro, Zhongke Lanxun, Juxin Technology, Quanzhi Technology, Jingchen Co., Ltd., Aojie Technology, and Tailingwei.

Main line 3: domestic supply chain - equipment+components+materials

Reason: (1) Overseas comprehensive control of semiconductors in mainland China is concentrated in the advanced logic and storage industry, and the urgency to localize the upstream supply chain has risen sharply; (2) China's autonomous and controllable enterprises account for relatively low global supply in various fields of equipment, equipment components, materials, and EDA, and there is huge domestic production space; (3) some domestic enterprises have achieved 0-1 breakthroughs in some market segments, and domestic related enterprises have benefited from accelerated localization and long-term industrial growth.

Focus: China Micro Corporation, North China Chuang, Huahai Qingke, Tuojing Technology, Xinyuan Micro, Shengmei Shanghai, China Shipbuilding Special Gas, Anji Technology, Jingrui Electric Materials, Fuchuang Precision, and Xinlai.

Risk warning: risk of changes in international trade policies, risk of demand falling short of expectations, risk of price competition.