Huachuang Securities: End-side AI iterative promotion drives terminal power consumption increase, consumer battery welcomes upgraded golden window period.

Huachuang Securities released a research report stating that the penetration rate of AI on the terminal side is clearly increasing, and the demand for endurance capacity of AI terminals is continuously upgrading, driving the consumer battery industry into a new cycle of innovation centered around energy density. New technologies such as steel-shell batteries, silicon-carbon anodes, and solid-state batteries are accelerating their landing, which is expected to drive both volume and price increases in the battery segment, with related companies in the industry chain potentially benefiting. It is recommended to pay attention to related companies in the battery industry chain. Huachuang Securities' main points are as follows: The advance of edge AI from the cloud to the terminal is driving the leap in computational power hardware, leading to a new round of upgrades in the battery industry. With the rise of AI computational power and the maturity of edge-cloud collaborative technology in terminal chips, AI terminals are rapidly evolving from smartphones and PCs to ubiquitous forms such as glasses, cars, drones, etc. Multimodal interaction and real-time generation are becoming mainstream, demanding new requirements for terminal computing power, memory, and data throughput, continuously driving the upgrade of edge hardware. Currently, the acceleration of edge AI processes urgently requires the breaking of battery endurance bottlenecks, which will promote both volume and price increases in the battery segment. This is specifically manifested in: 1) AI smartphones: Xiaomi, OPPO, vivo, Honor, etc. have increased battery capacity, with foldable screen models using a combination of one large and one small battery and some employing unique designs. It is expected that future capacities will further increase, driving the growth of battery structure and process value; 2) AIPC: Laptops commonly use a 6-cell battery pack to address the power consumption of large local models. In the future, they are expected to upgrade to larger capacities or multi-cell solutions to support high-intensity computing endurance; 3) AI glasses: Lightweight and long endurance are prominent contradictions, as seen with Ray-Ban MetaGen1 smart glasses, which have a 4-hour endurance in general use, but can only last 30 minutes when continuously using AI dialogue. Batteries need to increase energy density to achieve higher capacities in limited spaces such as the temple arms. The large-scale implementation of edge AI is driving the battery industry into a new round of upgrade cycles. Edge AI is driving the upgrade iteration of the battery industry, with steel-shell stacking, silicon-carbon anodes, and solid-state batteries becoming industry upgrade trends. The deep penetration of edge AI marks the transition of consumer electronics from "utility attributes" to "intelligent attributes," driven by the explosive growth of hardware computing power and power consumption. Traditional battery chemistry systems are no longer able to maintain endurance balance. The consumer battery industry has entered a new round of innovation cycle centered around "energy density." This is specifically manifested in: 1) Steel-shell stack batteries: In the transition from "soft pack" to "hard shell," steel-shell batteries are a key path for high-end AI terminals to break through the endurance bottleneck, thanks to their comprehensive advantages such as structural strength, space efficiency, and safety heat dissipation. Stacking technology, compared to traditional winding, offers advantages such as low internal resistance, uniform heat dissipation, and high space utilization, which can increase energy density. The entire iPhone 17 series from Apple has already adopted steel-shell batteries, with foldable screen models using unique dual battery designs. The penetration rate of stacking technology in consumer batteries is expected to continue to increase; 2) Silicon-doped anodes: Silicon-based anode materials, with an extremely high theoretical specific capacity (about 4200mAh/g, around 10 times that of graphite), have become a key technology direction for breaking through the energy density bottleneck. Starting in 2024, they have been mass-produced in high-end smartphones and are gradually penetrating into the mid-market. However, their over 300% volume expansion remains a commercialization challenge, with current research focusing on the structural design and interface control of silicon-carbon composite materials; 3) Solid-state batteries: As the next-generation lithium battery technology, solid-state batteries use non-flammable solid electrolytes to replace liquid electrolytes and separators, offering both high energy density and high safety. The theoretical energy density can reach over 500Wh/kg. Currently, solid-state batteries are in the small-scale trial production stage of the hundreds of MWh. It is expected that starting around 2026, major global car companies will successively begin testing vehicles with solid-state batteries installed, with practical use of solid-state batteries around 2027. Risk warning: The penetration rate of edge AI terminals may not increase as expected, and the progress of battery technology iteration may not meet expectations.