CITIC Securities: Supply and Demand, Coupled with Technological Advancement, Make Now the Time for Rare Earth Value Reassessment
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Nomura Securities: The core contradiction in the global storage industry remains a severe supply shortage, while AI-driven structural demand growth has not yet peaked.
According to Mars Finance, Nomura Securities, in its latest report, believes that the core contradiction in the global storage industry remains a severe supply shortage, and the structural demand growth driven by AI has not yet peaked. While recent investor concerns about oversupply are understandable, they are clearly excessive, and the market's overreaction may provide a window for reassessing the storage sector's valuation. Nomura Securities states bluntly in its report that market concerns are severely exaggerated. The cycle of semiconductor investment translating into actual production capacity is extremely long. South Korea's massive 4800 trillion won investment plan will take at least 5 to 10 years to convert into actual production capacity, and the squeeze on general-purpose storage capacity by high-profit HBM (high-bandwidth memory) is leading to a severe supply shortage in the market. Nomura Securities emphasizes that Meta's decision is by no means a turning point for reduced demand for AI-related hardware. On the contrary, due to the current shortage of computing power leading to an upward trend in single-token prices, the entry of Meta's computing power into the market is expected to stabilize token prices. (Cailian Press)
CITIC Securities: Significant fluctuations will not alter the AI supercycle; emphasize the importance of domestic computing power as a "Plan B".
According to Mars Finance, CITIC Securities points out that news of Meta's plan to lease out some of its computing power has once again triggered market concerns about computing power oversupply. This, coupled with concerns about cloud vendors' cash flow pressures, the continued rise in upstream prices, the slowdown in Capex growth, and overcrowding in AI transactions in recent months, is the main reason for the significant volatility in tech stocks. In the short term, Meta's move is primarily aimed at revitalizing its existing, outdated computing power assets. Considering its continued development of advanced models and investment in next-generation computing hardware, leasing out computing power is not contradictory to further increasing its investment in computing power. Furthermore, since computing power rental fees have continued to rise recently, concerns about computing power oversupply are unfounded. This round of tech stock adjustments is more of a deleveraging and rebalancing process in the recent global liquidity tightening environment, rather than a reversal of the AI industry trend. For the medium to long term, it is crucial to pay close attention to whether the next few months will see a similar breakthrough in AI capabilities as seen with OpenClaw and Coding Agent at the beginning of the year. In addition, it has been observed that after overseas AI assets entered a phase of high crowding, high correlation, and high volatility, international funds are beginning to seek differentiated sources of return. Domestic computing power with differentiated value, dubbed "Plan B," remains resilient and is expected to attract foreign investment. With the earnings season approaching, we recommend focusing on sub-sectors with high earnings certainty and reasonable valuations: In terms of growth prospects, we recommend domestic FAB (Featured Adhesives and Materials) and equipment sectors with positive narratives, as well as the optical communication sector with relatively low valuations; in the price increase chain, segments with high AI exposure and those that have already experienced price increases have a higher probability of realizing their earnings gains, such as memory and upstream PCB industries. (Cailian Press)
CITIC Securities: South Korea is expected to become a key player in the era of physical AI.
According to a research report by CITIC Securities, as reported by Mars Finance, physical AI continues to be a hot topic. Essentially, it's a different expression of the concepts of embodied intelligence and robotics. South Korea recently proposed a super project for physical AI, and our recent research on the South Korean robotics industry chain suggests that South Korea has the potential to become a significant player in the physical AI era. South Korea has a strong robotics industry chain, primarily focused on hardware, mainly driven by conglomerates like Hyundai Group. It has initially established a complete industry chain from upstream components to downstream manufacturing of various complete machines. However, it still lags behind China and the US in terms of embodied models and cost reduction capabilities in the supply chain.
Huatai Securities: South Korea's high export growth indicates that global AI supply chain trade is still on an upward trend, and the Asian AI supply chain is expected to continue to benefit.
Mars Finance reported on July 6th that a research report from Huatai Securities pointed out that the continued strong performance of AI chain exports drove South Korea's June exports to significantly exceed expectations, with the trade surplus reaching a new historical high. Looking ahead, leading indicators show that AI chain trade will maintain high growth, and South Korean exports are expected to continue their strong performance, potentially driving South Korea's nominal GDP to maintain a relatively high growth rate. In the short term, the Philadelphia Semiconductor Index, which leads South Korean semiconductor exports by about four months, remains high year-on-year, indicating that the strong performance of South Korean semiconductor exports is likely to continue; at the same time, against the backdrop of strong AI demand, memory prices are still rising, and prices will continue to support nominal exports. The high growth of South Korean exports indicates that global AI chain trade is still on an upward trend, and the AI supply chain in Asia, including South Korea and China, is expected to continue to benefit. (Wide Angle Observation)
CITIC Securities: The main theme of domestic computing power is clear; leading companies' performance is expected to accelerate.
According to a research report by CITIC Securities, as reported by Mars Finance, the capabilities of domestic computing power systems have evolved from inference to training. With the official release of DeepSeek V4 in mid-July, a "peak-valley pricing" mechanism will be introduced, doubling the price of API calls during peak periods, further intensifying the supply constraints of domestic computing power. We believe that the clarity of domestic computing power orders has significantly improved at this stage, and design companies with priority in customer order and capacity allocation are expected to benefit first. We remain optimistic about the domestic computing power industry chain, anticipating significant growth opportunities for everything from scarce advanced process capabilities to a thriving design sector and supernodes. Meanwhile, advanced processes, advanced packaging, advanced storage, and related supply chains are expected to experience strong growth momentum. (Cailian Press)
Goldman Sachs: Demand continues to far exceed supply; raises TSMC ADR target price to $600
According to Mars Finance, Goldman Sachs raised its 12-month target price for TSMC from NT$2,750 to NT$3,000 ahead of the company's second-quarter earnings release. The target price for TSMC's ADRs was also raised from US$550 to US$600, with a reiterated "Buy" rating and maintained a PE ratio of 22x based on the company's estimated 2027 EPS. Goldman Sachs believes that demand for AI and high-performance computing (HPC) has been a structural growth engine for TSMC for many years. Last quarter, the bank observed even stronger momentum in 2027, particularly from demand for AI accelerators and server CPUs, with demand continuing to far exceed supply in both advanced process nodes and advanced packaging. Goldman Sachs expects TSMC to further accelerate its capacity expansion and capital expenditures, while continued productivity improvements and strategic pricing will drive gross margins towards a structurally higher trajectory in 2027 and beyond. (Cailian Press)