Guojin Securities: NVIDIA B-Series Chips in Full Production, Focus on Industry Chain Pulling Opportunities

According to the financial news app Zhitong Finance, Guojin Securities released a research report stating that there is strong demand for AI, and the AI capital expenditure of the four major cloud companies in North America continues to grow. Jensen Huang, CEO of NVIDIA (NVDA.US), mentioned in an interview that the demand for Blackwell chips is strong. The company has started mass production and will begin shipping in the fourth quarter, expecting to contribute tens of billions of dollars in revenue in the fourth fiscal quarter. With the large-scale shipment of NVIDIA's B series chips, the industry chain will see good opportunities for growth, and core beneficiary companies are expected to perform well. In addition, it is recommended to pay attention to the upcoming launch of Apple Intelligence in October, which is expected to empower the new iPhone 16 and accelerate the replacement cycle. The outlook remains positive for consumer electronics innovation/recovery, AI-driven industries, and those benefiting from autonomous controllability.

NVIDIA's B series chips are in full production, focusing on industry chain growth opportunities. On September 13th, Jensen Huang mentioned in an interview that the demand for Blackwell chips is strong. The company has started mass production and will begin shipping in the fourth quarter, expecting to contribute tens of billions of dollars in revenue in the fourth fiscal quarter. Guojin Securities believes that there is strong demand for AI, and the AI capital expenditure of the four major cloud companies in North America continues to grow. With the large-scale shipment of NVIDIA's B series chips, the industry chain will see good opportunities for growth, and core beneficiary companies are expected to perform well.

Benefiting from AI applications, Oracle's performance in the most recent quarter exceeded expectations, and the outlook for cloud revenue is optimistic. The company has raised its revenue forecast for fiscal year 2026 to at least $66 billion. Oracle's cloud has been successful in generating AI workloads.

Benefiting from AI and Apple's new product stocking, TSMC's sales in August reached NT$250.9 billion, a 33% year-on-year increase. SK Hynix will convert its M10F line at the Icheon Semiconductor Plant in South Korea into a DRAM production line, shifting to produce the fifth-generation HBM3E. After the M10F production line is launched, SK Hynix's monthly HBM production capacity is expected to increase to 150,000 pieces.

With the recovery in industry chain demand, the overall revenue of the electronics industry in the second quarter of 2024 was $838.8 billion, a 37% year-on-year increase and a 15% quarter-on-quarter increase. Net profit attributable to shareholders was $37.9 billion, a 75% year-on-year increase and a 43% quarter-on-quarter increase. According to SIA data, global semiconductor sales in July 2024 reached $51.3 billion, an 18.7% year-on-year increase and a 2.7% month-on-month increase. Monthly sales have seen four consecutive months of quarter-on-quarter growth, with the Americas market showing the strongest growth at 40.1% year-on-year and mainland China at 19.5% year-on-year. It is recommended to pay attention to the upcoming launch of Apple Intelligence in October, which is expected to empower the new iPhone 16 and accelerate replacements. Guojin Securities believes that AI empowers consumer electronics, which is expected to bring new replacement demand. The outlook remains positive for AI-driven industries, consumer electronics innovation/recovery, and those benefiting from autonomous controllability.

Segmented Tracks:

1. Semiconductor Foundry: TSMC's August revenue increased by 33% year-on-year but decreased by 2.4% quarter-on-quarter. SMIC's revenue guidance for the three bases increased by 13-15% quarter-on-quarter.

2. Industrial, Automotive, Security, Consumer Electronics: According to Canalys, global PC shipments reached 62.8 million units in Q2 2024, a 3.4% year-on-year increase. Global smartphone shipments reached 288 million units in Q2 2024, a 12% year-on-year increase On September 9th, Apple released the iPhone 16 series, all equipped with the A18 chip, and the AppleIntelligence system gradually went online for upgrades, which is expected to drive a new wave of replacement cycles. According to the China Passenger Car Association, the sales of new energy passenger vehicles in August reached 980,000 units, a year-on-year increase of 37%, with a penetration rate of 53%.

3. PCB: Looking at the overall situation of the PCB industry chain, the industry's prosperity continued to rise in the second quarter. However, it is worth noting that in June, the PCB manufacturing sector was under significant pressure month-on-month, partly due to limited operation caused by tight power supply in the Chinese Taiwan region.

4. Components: In the short term, mainland panel factories will reduce production to adjust the supply-demand balance, easing price pressures. According to the Economic Daily, benefiting from the recovery in demand for smartphones and PCs, coupled with the traditional peak season approaching and the sharp rise in silver prices, companies like Murata and TDK are preparing to raise product prices. The price increase products are initially focusing on multilayer inductors, magnetic beads, and other products, with price hikes of up to 20%.

5. IC Design: Major memory manufacturers are shifting towards DDR5/HBM, providing development opportunities for A-share niche memory companies. With mainstream memory prices continuing to rise and the continuous digestion of inventory by the three major manufacturers, funds will focus on future strong demand areas such as DDR5 and HBM after capital inflows, accelerating the exit from the niche memory market.

Investment Advice and Valuation

Guotai Junan Securities believes that with strong demand for AI, the continuous high growth in AI capital expenditure by the four major cloud companies in North America, and the large-scale shipment of NVIDIA's B-series chips, the industry chain will usher in good opportunities for pulling goods. It is optimistic about core beneficiary companies. It is recommended to pay attention to the upcoming Apple Intelligence in October, which is expected to empower the new iPhone 16, accelerating the replacement cycle. Continued optimism towards the consumer electronics innovation/recovery in demand, AI-driven, and self-controllable beneficiary industry chain.

Risk Warning

Risks include slower-than-expected demand recovery, slower-than-expected progress in AIGC, and further escalation of external sanctions