Huaxi: Supply-demand gap and capital expenditure resonate, domestic computing power maintains high prosperity.

Huaxi released a research report stating that the DRIVE of current domestic computing power has shifted from "single-card performance catch-up" to "system-level engineering capability + supply guarantee capability." Authoritative institutions' simultaneous upward revisions of computing power scale and market space, along with the order-of-magnitude leap in Token call volume, jointly confirm the structural change on the demand side "with Agent and inference as the core amplifiers." Cloud vendors' capital expenditure is accelerating, and domestic computing power demand remains in a high-speed growth channel. At the same time, the structural mismatch in computing power will benefit leading manufacturers with system-level supply capabilities such as super-node complete machines, optical interconnection, and liquid cooling, and the trend of accelerating domestic substitution is clear. Huaxi's main viewpoints are as follows: 1. Huawei Ascend: Share statement and system-level route continue to be verified The DRIVE of current domestic computing power has shifted from "single-card performance catch-up" to "system-level engineering capability + supply guarantee capability." On the one hand, the Atlas 950 super node pulls the competition dimension to rack/cluster-level interconnection (Scale-up), using systematic deployment to hedge against single-card process constraints; on the other hand, near-package optical routes such as NPO mean that the optical interconnection segment is accelerating its penetration toward the chip side, and the domestic supply chain in optical engines, optical components, and high-speed connection segments is expected to benefit simultaneously. Under the domestic orientation of "prioritizing supply guarantees," the Ascend ecosystem's share advantage is expected to be further consolidated, and the industrial chain's expansion demands to "go a bit faster and produce a bit more" will also be transmitted to supporting segments such as server complete machines, switching, optical interconnection, liquid cooling, and power supplies. 2. Domestic computing power demand: Authoritative forecasts revised upward, supply-demand gap resonates with capital expenditure (1) Sustained increase in Token consumption drives computing power demand continuously higher Authoritative institutions' simultaneous upward revisions of computing power scale and market space, along with the order-of-magnitude leap in Token call volume, jointly confirm the structural change on the demand side "with Agent and inference as the core amplifiers." Unlike the pulse-like demand of traditional training, the Token consumption brought by Agentic AI is more sustained, determining that computing power demand will remain at a high level rather than forming a one-time peak. (2) Structural mismatch in computing power, tight supply-demand and capacity gap in high-end computing power The essence of the supply-demand gap is insufficient "effective supply" rather than total oversupply: high-end computing power is constrained by advanced processes, HBM, and system integration, making rapid volume ramp-up difficult in the short term, and rising quotations are a direct reflection of scarcity; while the relative idleness of low-end/general-purpose computing power suggests that the industry will accelerate concentration toward high-end forms featuring high density, high interconnection, and high energy efficiency. This structural mismatch will benefit leading manufacturers with system-level supply capabilities such as super-node complete machines, optical interconnection, and liquid cooling. (3) Cloud vendors' capital expenditure accelerating Domestic computing power demand remains in a high-speed growth channel, with agents and Token consumption as the core amplifiers, and the supply-demand gap in high-end computing power is difficult to fully alleviate in the short term; at the policy level (such as domestic procurement requirements for newly built intelligent computing centers), domestic computing power is also continuously being strengthened to undertake demand, and the trend of accelerating domestic substitution is clear. Risk warnings: The impact of uncertainty in geopolitical conflicts; competition among technology routes; the sustainability of AI computing power price increases falling short of expectations; progress in related technologies and applications falling short of expectations; commercial space launch progress falling short of expectations; and commercialization progress of satellite internet falling short of expectations.