China Securities Co., Ltd.: DeepSeek plans to raise prices, continuing to focus on domestic large models and the computing power industry chain.

China Securities Co., Ltd. released a research report stating that on August 3rd, Alibaba launched its next-generation flagship model Qwen3.8-Max, with a total parameter count reaching 2.4 trillion and approximately 95 billion active parameters, further enhancing capabilities in reasoning, coding, and Agent functions. On August 6th, DeepSeek announced plans to significantly raise API service pricing shortly. Foxconns revenue in July exceeded 900 billion New Taiwan dollars for the first time, setting a historical record. TrendForce has raised its forecast for global AI server shipment year-on-year growth in 2026 to nearly 31%. The global AI computing power industry remains robust, and attention should be paid to undervalued rebound opportunities for companies along the AI computing power industrial chain. Key points from China Securities Co., Ltd. are as follows: On August 3rd, Alibaba launched its next-generation flagship model Qwen3.8-Max, achieving a total parameter count of 2.4 trillion and approximately 95 billion active parameters, with further improvements in capabilities for reasoning, coding, and Agents. Simultaneously, it advanced the public testing of its enterprise-level Agent Qianwen office, indicating that the competition among large models is accelerating from a simple comparison of capabilities to an emphasis on Agents and commercial applications. On August 6th, DeepSeek announced plans to significantly raise API service pricing in the near term, with a considerable expected increase, though specific details are pending formal notification. Previously, DeepSeek implemented a peak and valley pricing mechanism, where API prices during peak hours are double those during off-peak times. The institution believes that leading companies like Alibaba continue to expand model scales and strengthen Agent capabilities, while DeepSeek's gradual shift towards raising prices reflects that domestic large models are entering a stage of "capability enhancement + commercial monetization." The expanding model parameter scales, increased frequency of Agent calls, and growing API demand are expected to further boost reasoning-side computing power consumption, warranting continued attention to investment opportunities in domestic large models and the domestic computing power industrial chain. Foxconn reported revenue of 946.5 billion New Taiwan dollars in July 2026, a year-on-year increase of 54.2%, marking the first monthly revenue to exceed 900 billion New Taiwan dollars and reaching a historical high, primarily benefiting from strong growth in cloud network products, where AI servers and AI cabinets remain in high demand. The company expects the momentum for AI cabinet shipments to continue into the third quarter. Meanwhile, TrendForce has recently revised its AI server demand forecast, raising the global year-on-year growth rate for AI server shipments in 2026 from approximately 28% to nearly 31%, primarily driven by North American CSPs continuously expanding purchases of cabinet-level AI servers like GB/VR, the ramp-up of self-developed ASICs by Google and AWS, and Chinese cloud providers increasing their deployment of domestic AI computing power. TrendForce anticipates that capital expenditures from the top nine global CSPs will grow by about 90% year-on-year in 2026. China Securities Co., Ltd. believes that the high growth in Foxconns revenue corroborates with TrendForce's ongoing upward revisions of industry shipment expectations, indicating that the global AI computing power industry remains in good condition, and attention should be paid to rebound opportunities for companies along the AI computing power industrial chain that are currently undervalued. Reuters cited information from four insiders reporting that the U.S. Federal Communications Commission (FCC) is drafting new regulations to prohibit the import of new optical transceiver modules from China intended for AI data centers. China Securities Co., Ltd. believes that this event is still at the stage of media reporting, and it is unclear whether and how it will be implemented, making it difficult to accurately assess the actual impact. However, drawing from the relevant measures implemented by the U.S. against inverters, it is still advisable for the market to closely monitor the situation. Risk Factors Changes in the international environment affecting the security and stability of the supply chain, impacting related companies' progress in overseas expansion; tariff impacts exceeding expectations; underperformance of the AI industry affecting demand for cloud computing industry chain companies; intensified market competition leading to rapid declines in gross margins; exchange rate fluctuations impacting the foreign exchange earnings and gross margins of export-oriented companies, including those in the ICT equipment and optical module/device sectors; the development of the digital economy and Digital China construction falling short of expectations; telecom operators cloud computing business development underperforming; operators capital expenditures not meeting expectations; cloud vendors' capital expenditures not meeting expectations; and demand for communication modules and smart controllers falling below expectations.