Summary of Conference Call on CPO by Huatai Communication Industry Focus - The discussion centers around the **CPO (Co-Packaged Optics)** technology and its rising market interest, indicating a significant shift in investment focus towards this area [1][2]. Core Insights and Arguments 1. **Rising Market Attention**: - The market's attention on CPO has rapidly increased due to potential catalysts expected in the next 1-2 months, including GTC, OFC, and related US earnings reports. Additionally, the surge in Taiwanese stocks related to CPO has contributed to this heightened interest, alongside a shift in A-share market focus from quarterly performance to long-term growth potential [2][3]. 2. **Application Scenarios**: - CPO technology is expected to reduce power consumption and lower trial-and-error costs. Companies like NVIDIA and Broadcom are anticipated to lead the push for CPO in the "scale out" side, while the "scale up" side will leverage CPO's advantages in transmission distance and integration, potentially allowing for optical integration within cabinets, indicating a broad future growth space [4]. 3. **Mass Production Timeline and Clients**: - NVIDIA is projected to achieve mass production of CPO by Q4 2026, with bulk production starting in 2027. Clients likely to adopt these solutions first include those purchasing complete NV solutions, such as CoreWeave and Lambda in NeoCloud, as well as major CSPs like Microsoft and Oracle [5]. 4. **Investment Opportunities**: - CPO is expected to drive incremental demand for both active and passive components. The report highlights optimism for passive components like FAU/MPC, shuffle, and polarization-maintaining MPO, with companies such as Tianfu, Zhishang, Taichengguang, and Juguang being key players. For active components, leading optical module manufacturers like Xuchuang and Xinyi are expected to engage in optical engine design, while optical chip manufacturers like Yuanjie may enter the ultra-high power CW light source market [6]. Other Important Insights - The report emphasizes the importance of understanding the evolving landscape of CPO technology and its implications for various stakeholders in the optical communication industry. It also notes that the insights regarding companies not covered in the report are based on publicly available information [6].

Group 1: Semiconductor Market Focus - The focus is on the air market, particularly on analog semiconductors that are essential for various applications [1][2] - Companies like Amphenol are key suppliers in air systems, which are critical for NVIDIA's products [2][3] - There is a significant increase in complexity for NVIDIA's supply chain due to the transition from 8 GPUs to 72 GPUs, indicating a major product moment for the company [5][6] Group 2: Supply Chain and Domestic Manufacturing - The process of onshoring supply chains in the U.S. will take years, and the current focus is less on this timing [4][6] - NVIDIA's capital commitments and production in Arizona are highlighted, but the broader opportunity for investors extends beyond NVIDIA [3][4] Group 3: Market Dynamics and Geopolitical Factors - The demand for manufacturing is outstripping supply, which is a critical concern for investors [11] - The geopolitical landscape, particularly U.S.-China relations, is affecting the semiconductor industry, with rare earth stocks experiencing significant gains [9][10] - There is potential for improved relations between the U.S. and China, which could benefit the semiconductor sector [13][14]