AI-Powered, Satellites Soaring! Networking and Optical Communications Enter a Golden Era, Institutional Investors Positioning at Bottom!

As the surge in AI computing power meets the accelerated commercialization of low-orbit satellites, a revolutionary transformation in bandwidth and space broadband has officially arrived! Dual powerful engines are igniting explosive demand for hardware equipment, propelling the networking and optical communications industries into an unprecedented golden era, attracting institutional funds to quietly position at low levels.

AI Drives Bandwidth Upgrades, Switches and Optical Communications Lead the Charge

The expansion of AI computing power is rapidly upgrading data center network architectures, boosting shipment momentum across related supply chains. Accton (2345-TW) benefited from strong shipments of its customers' next-generation AI accelerators, achieving a record year-on-year revenue increase in June. Higher-end 1.6T switches are expected to begin shipments in the second half of the year. In optical communications, United Microelectronics (3081-TW) saw a significant increase in silicon photonics product shipments, driving June revenue to grow over 120% year-on-year. Although the market has concerns about delays in the timeline for CPO (Co-Packaged Optics), United Microelectronics' current revenue and profit structure primarily comes from optical transceiver modules, making the impact of CPO delays extremely limited. Major players like Lumentum and Coherent are also actively expanding production capacity to address supply shortages.

Stable Demand for Low-Orbit Satellites, Networking Giants See Profit Surge

In the space broadband sector, strong momentum from low-orbit satellites and telecom operators has become a key pillar for networking manufacturers. Wistron NeWeb (6285-TW) benefited from customer pull from Service Providers, achieving an 84% year-on-year revenue increase in June, setting a new historical high. The company has also raised its full-year revenue outlook to between NT$148 billion and NT$150 billion. Alpha Networks (5388-TW) also benefited from recovering demand from telecom and enterprise sectors, with current orders fully booked. June revenue rose nearly 71% year-on-year, setting a record high for the same period. Additionally, microwave component manufacturer Sunplus Technology (3491-TW), although temporarily halted shipments due to a customer product revision, secured profitability through compensation fees, with subsequent restocking momentum remaining robust.

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Dual Growth Drivers Enable Structural Growth, Position in Trend Leaders on Dips

The networking and optical communications industries are on a long-term structural growth trajectory driven by the dual engines of 'AI Infrastructure' and 'Space Broadband.' Lide Optoelectronics - KY (7717-TW), which provides optical transmission components for satellite-to-satellite communication, benefits not only from increased satellite launches but is also expected to see growth contributions from smart medical lighting products by year-end. Given the highly optimistic outlooks and excellent order visibility for leading companies such as Accton (2345-TW), Wistron NeWeb (6285-TW), Alpha Networks (5388-TW), and United Microelectronics (3081-TW), investors should focus on industry leaders with exposure to high-end switches, silicon photonics, and low-orbit satellite themes to capture long-term investment returns from communication infrastructure upgrades. We invite investors to download Teacher Zhilin's APP and follow live streams to jointly grasp the front-line dynamics of the industry!

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Source: Analyst Chen Zhi-Lin / Kaixu Investment Consulting

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