According to a research report from China Galaxy Securities, the market share of domestic chips in China's cloud AI accelerator market is projected to rise to approximately 41% by 2025. Within this segment, Huawei's Ascend processors are expected to ship about 812,000 units, capturing a 20% market share, positioning it second only to Nvidia (55%) and leading significantly among domestic manufacturers. Additionally, the results for China Mobile's special optical cable procurement project for 2026-2027 have been announced. This procurement includes five types of products such as submarine optical cables, air-blown micro cables, and optical-electrical composite cables, with a total volume of approximately 79,400 sheath-kilometers (equivalent to 3.131 million fiber-kilometers). The project set a maximum bid price, excluding tax, of around 251 million yuan. Notably, with the exception of the top-ranked bidder, the other seven participating manufacturers submitted bids at this maximum price ceiling, providing further evidence of a significant upward trend in optical fiber and cable prices. The main viewpoints from China Galaxy Securities are as follows:
The communications sector rose by 3.01% over the week, with sub-sectors such as optical fiber & cable and optical components performing particularly well. During the same period, the Shanghai Composite Index fell by 0.86%, the Shenzhen Component Index declined by 2.96%, and the ChiNext Index dropped by 4.44%. Among primary industry indices, the communications sector's 3.01% gain stood out. Based on the firm's segmentation of communications companies, related stocks in the optical fiber & cable and optical components sub-sectors showed strong performance, with the sub-sectors rising by 18.80% and 7.99%, respectively. Within the communications sector, the proportions of stocks that advanced, remained flat, and declined were 25.95%, 4.58%, and 69.47%, respectively.
Key industry developments from the week include: 1) China Mobile's special optical cable procurement sets a new high price ceiling: The results of China Mobile's 2026-2027 special optical cable procurement project confirm a notable trend of rising prices. The procurement, covering five product types including submarine and air-blown micro cables, has a substantial volume. The fact that seven out of eight bidders, excluding the winner, bid at the maximum price limit strongly indicates sustained price increases for optical fibers and cables. 2) LightCounting forecasts 60% growth in Ethernet optical module sales for 2026: According to LightCounting's latest projections, sales of Ethernet optical modules are expected to grow by 60% in 2026, following a doubling in 2024 and a further 70% increase in 2025. The expansion of AI cluster sizes necessitates more optical modules per GPU—up to six for scale-out networks—while the bandwidth demands of scale-up networks are nearly ten times higher, creating new market opportunities for optical module suppliers. 3) IDC report shows domestic chips exceed 40% share, with Huawei Ascend leading the pack: A recent IDC report indicates that domestic chips are projected to capture over 40% of China's cloud AI accelerator market by 2025. Huawei's Ascend is the clear leader among local vendors, with an estimated 812,000 units shipped for a 20% market share. Alibaba's T-Head follows with about 256,000 units (7% share), while Baidu's Kunlun Xin and Cambricon each shipped approximately 118,000 units (3% each). Hygon Information shipped 83,000 units (2%), with companies like MetaX and Tinymind also holding shares. The report notes a preference for domestic chips in intelligent computing center construction, fueling rapid growth for local manufacturers. 4) MIIT advocates accelerated development of low-orbit satellite internet networks: At the "Space Computing Industry Conference" held on April 3, 2026, a deputy director of the MIIT's Information and Communication Development Department emphasized the need to speed up the deployment of low-orbit satellite internet networks, advocate for moderately ahead-of-schedule construction of new infrastructure, and establish a multi-level computing facility system. Space computing involves key areas such as satellite-borne AI chips, inter-satellite laser communication, power supply and thermal management, rocket launches, and satellite manufacturing, offering strategic advantages like in-orbit real-time processing and low-cost energy for wide-area coverage. China currently has multiple constellation plans underway, with experimental satellite verifications progressing steadily and ongoing collaboration on in-orbit deployment of large models. Future efforts must address challenges related to chip performance and inter-satellite communication to systematically advance the space computing industry.
Risk factors include the potential for slower-than-expected adoption of AIGC applications, uncertainties surrounding domestic and international policies and technological friction, and risks associated with the pace of large-scale 5G commercial deployment.
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