Tianfeng: the demand for basic computing power infrastructure is high, focusing on the transformation opportunities of the construction sector.

Tianfeng released a research report stating that, driven by computing power, the market size of China's IDC industry is expected to reach 626 billion yuan by 2028, with a large future market demand. The demand for AI applications driving computing power infrastructure is growing rapidly, with a focus on the transformation opportunities in the construction sector. The construction of intelligent computing centers is moderately ahead, and is expected to become an important infrastructure to promote the development of digital economy. Tianfeng analyzes the layout of the construction sector in the field of computing power, mainly focusing on construction, computing power leasing, equipment supply, and computing power applications in four directions, and suggests paying attention to the transformation actions of construction companies. The main views of Tianfeng are as follows: The rapid growth of computing power infrastructure demand driven by the application of AI, focusing on the transformation opportunities in the construction sector This week, Alibaba released its third quarter financial report for the 2025 fiscal year, with AI-related product revenue growing by three digits for six consecutive quarters. Group CEO Wu Yongming stated that the group's investment in cloud and AI infrastructure in the next three years is expected to exceed the total of the past ten years. The application of AI drives the rapid growth in demand for basic computing power infrastructure. According to the "2022-2023 China Artificial Intelligence Computing Power Development Evaluation Report," it is expected that China's intelligent computing power scale will reach 1271.4 EFLOPS by 2026, with a compound annual growth rate from 2021 to 2026 reaching 52.3%. Influenced by the computing power drive, the compound annual growth rate (CAGR) of China's IDC industry market size is expected to be 21.39% from 2023 to 2028. By 2028, the market size of China's IDC industry is expected to reach 626 billion yuan, with a large future market demand. The construction of intelligent computing centers is moderately ahead, and the "East-Count West-Compute" project accelerates the overall planning and construction of the national computing power network The construction of intelligent computing centers is moderately ahead, and is expected to become an important infrastructure to promote the development of the digital economy. According to incomplete statistics from the Chinese IDC industry, there are currently over 500 intelligent computing center projects in different stages of construction, with 160 projects in operation, and over 200 projects under construction and development. Internet giants such as Alibaba, Baidu, Tencent, etc., with their deep accumulation in the fields of cloud computing and big data, are also actively deploying in the field of intelligent computing centers. The "East-Count West-Compute" project accelerates the overall planning and construction of the national computing power network, and as of the end of June 2024, the direct investment in the eight major national hub nodes of "East-Count West-Compute" exceeded 43.5 billion yuan, driving investment of over 200 billion yuan. The total cost of "East-Count West-Compute" is estimated to reach 400-500 billion yuan, with more than half of the planned investment already in place. The remaining construction corresponds to an investment of approximately 27.2-54.6 billion yuan, and attention should be paid to the demand for computing centers construction. Risk warning: Increased industry supply leading to intensified competition; Capital expenditures by operators, Internet giants, etc., falling short of expectations; Construction company transformation falling short of expectations; Risk of severe market fluctuations.