AI Ether Value Analysis

AI Ethernet is becoming a new trend in network connectivity. NVIDIA has recently actively embraced Ether, launching the SpectrumX-800 Ethernet product, and expects related revenue to reach billions of dollars next year.

Ethernet has the following advantages over IB networks:

• High compatibility, low cost, good flexibility
• High user acceptance and strong mass foundation
• Performance is gradually improving, surpassing the IB network in certain scenarios.

Currently, the AI Ether network has formed two major camps:

1. Hyper Ether Alliance ( UEC ): Equipment vendors such as AMD, Arista, Broadcom, and cloud providers such as Meta and Microsoft form a coalition.
2. NVIDIA Spectrum-X Platform: A comprehensive system network architecture that includes both hardware and software.

The future Ether network is expected to become the mainstream solution for AI network connectivity, with reasons including:

• Better performance and large-scale cluster capabilities
• A more open ecosystem
• Better suited to the enormous demand for computing power by AIGC

In terms of optical module selection, the LPO solution may become the best choice for AI Ethernet, featuring advantages such as low power consumption, low latency, and low cost.

Overall, the application of Ethernet in the AI field will drive the rapid development of the industrial chain, including switches, optical modules, and more. It is recommended to pay attention to related chip, manufacturing, and brand companies.

The Top 10 Global Optical Module Rankings for 2023 Released

LightCounting released the 2023 global top 10 optical module list:

• Xu Chuang Technology ranks first for the first time
• A total of 7 Chinese manufacturers made the shortlist, occupying a dominant position.
• Coherent(Finisar) ranked second
• Huawei ranked third
• Intel exits the list

2023 Light Module Market Characteristics:

• Overall revenue slightly decreased to 10.9 billion USD.
• The demand for AI has driven a surge in the demand for 400G/800G optical modules.
• Expected revenue growth of 27% in 2024, reaching 22.4 billion USD by 2029.
• Integrated photonic technology has become a development trend

Google invests $2 billion to build a data center in Malaysia

Google announced an investment of $2 billion in Malaysia, including:

• Establish the first data center
• Establish a new Google Cloud region
• Promote the development of the artificial intelligence field
• Support for AI literacy programs for students and educators

This is Google's largest investment in Southeast Asia. Southeast Asia has recently become a hotspot for investment by global tech giants, and it is expected that:

• By 2030, AI is expected to contribute approximately $1 trillion in growth to the Southeast Asian economy.
• By 2028, the demand for data centers in Southeast Asia and North Asia is expected to grow at an annual rate of 25%.
• Southeast Asia is expected to become the second largest source of data center revenue globally.

Micron expects a significant increase in HBM memory sales

Micron Technology stated at the investor meeting:

• This fiscal year's HBM sales will reach hundreds of millions of dollars.
• The next fiscal year will start in September 2024, and ( will reach billions of dollars.
• The HBM market share in fiscal year 2025 is expected to be on par with the overall DRAM market.
• It is expected that storage prices will rise in the second half of 2024 to 2025.
• 12-layer HBM3E is undergoing qualification verification and will be produced based on customer demand.
• By 2025, the industry will gradually transition from 8 layers to 12 layers of HBM.

Micron is optimistic about the development of AI PCs and smartphones, and will focus on developing new features for these devices.

Gartner predicts that public cloud spending will exceed $675 billion in 2024.

Gartner's latest forecast:

• Global public cloud service spending will reach 675.4 billion USD in 2024, an increase of 20.4% year-on-year.
• Growth is primarily driven by generative AI and modern application transformation.
• It is expected that public cloud spending will exceed 1 trillion dollars by the end of this decade.

Expected growth in various segments in 2024:

• IaaS grew by 25.6%, the fastest growth rate.
• PaaS grew by 20.6%, ranking second.
• SaaS remains the largest area of expenditure, expected to grow by 20% to $247.2 billion

The demand for AI model training and inference drives strong growth in IaaS. The modernization of applications and specific use case demands drive continuous growth in SaaS.

The "National Big Fund" Phase III officially established

The National Integrated Circuit Industry Investment Fund Phase III Co., Ltd. was registered and established on May 24, main information:

• Registered capital of 344 billion yuan
• Legal representative: Zhang Xin
• Scope of business: Private equity investment fund management, venture capital fund management, etc.
• Major shareholders: China Development Finance, China Mobile Capital, six major state-owned banks, etc.
• The six major banks account for 33.14% of the investment.

This is the third phase of the "Big Fund" after 2014 and 2019, aimed at promoting the development of the domestic integrated circuit industry. The fund will operate in a market-oriented and professional manner, focusing on supporting the integrated circuit manufacturing sector.