CITIC Securities: The Logic of Computing Power Changes, Rebalancing from "Price Increase" to "Volume Expansion"

In the first half of 2026, capital expenditures by overseas cloud vendors continued to grow at a high rate and were repeatedly revised upward. The shipment growth of AI servers significantly outpaced the overall server market, while global computing power infrastructure remained in a concentrated construction phase. At the same time, the squeeze of HBM on advanced DRAM wafer and packaging capacity tightened the supply-demand balance in storage, with price increases further spreading to copper-clad laminates, electronic fabrics, passive components, and other high-end parts. The combination of rising prices and product structure upgrades improved profitability across the industry chain. However, as price-sensitive assets like storage underwent deleveraging and risk repricing, the market began to reassess the sustainability of price increase slopes and high profit margins. We believe that the second half of 2026 will not signify a complete transition from price increases to a volume surge; rather, price rises will continue, albeit at a potentially marginally slowing rate. In market positioning, overseas focus will prioritize advanced packaging, testing, and core equipment, followed by optical communications, switching networks, high-speed connections, and data center infrastructure. AI chips will remain the core vehicle for capital expenditures, with memory manufacturers closely observing price slopes, long-term contract conditions, and capacity fulfillment. Domestically, the focus will be on two main lines: the global AI supply chain and domestic semiconductor equipment, paying attention to optical modules, high-end PCBs, high-speed copper connections, as well as etching, deposition, testing, and bonding equipment. Power supplies, liquid cooling, semiconductor materials, and equipment parts can serve as potential directions for subsequent diffusion. Gradually increasing attention on orders, capacity, and delivery fulfillment will ensue.