Sinolink Securities Co., Ltd. (600109) has reiterated its positive stance on three key investment themes: AI computing hardware, semiconductor self-sufficiency, and on-device AI innovation. The brokerage notes that continued shipments of next-generation GPUs and custom ASIC products from hyperscalers like Google and Amazon are expected to sustain strong growth in demand for AI servers and high-speed switches, which underpins a favorable outlook for AI printed circuit boards (PCBs), copper-clad laminates, and the broader upstream supply chain.

On the semiconductor front, the firm highlights that domestic advanced logic and memory fabrication lines are undergoing sustained capacity expansion. This is driving the ongoing localization of equipment, components, and materials. Additionally, an upward memory cycle, combined with the ramp-up of domestic AI accelerator chip volumes, is set to improve profitability within the design segment, supporting a bullish view on core companies in the self-reliant supply chain. Regarding on-device AI, the report points to potential new demand stemming from hardware innovation cycles, including upcoming Apple product launches, AI-powered smart glasses, and other AIoT devices.

Financial results for the electronics sector in the first half of 2026 showed robust growth, with total revenue reaching RMB 2,449.72 billion, a year-on-year increase of 30.98%. Net profit attributable to shareholders surged 99.38% to RMB 173.76 billion, with earnings growth significantly outpacing revenue. In the second quarter alone, revenue rose 34.81% to RMB 1,362.99 billion, while net profit jumped 124.61% to RMB 112.29 billion. The first half's performance was driven by sustained high demand for AI cloud infrastructure, rapid advancements in domestic semiconductor self-sufficiency with standout results in equipment, computing chips, and design, and improving consumer electronics demand from accelerated on-device AI adoption and new product cycles. The sector's gross margin for H1 2026 stood at 17.5%, up roughly 1.8 percentage points year-on-year, with a net margin of 7.1%, up about 2.4 percentage points, reflecting enhanced profitability through product mix optimization and economies of scale.

Benefiting from sustained high demand for AI computing, the PCB sector has experienced both volume and price increases. The industry generated RMB 186.12 billion in revenue during H1 2026, a 36.48% year-on-year increase, with net profit attributable to shareholders rising 72.66% to RMB 21.74 billion. Second-quarter revenue grew 47.45% to RMB 103.59 billion, while net profit surged 95.67% to RMB 13.72 billion. The gross margin for the period was 25.3%, with a net margin of 11.9%. The continued growth in AI computing demand, coupled with a rising share of high-end products, is expected to sustain the momentum across the PCB, copper-clad laminate, and their associated equipment, electronic yarn, and copper foil supply chains.

In the semiconductor equipment segment, H1 2026 revenue reached RMB 55.37 billion, up 26.33% year-on-year, while net profit attributable to shareholders grew 71.94% to RMB 11.66 billion. Quarterly data showed second-quarter revenue up 42.01% to RMB 29.88 billion and net profit up 92.94% to RMB 7.22 billion. Domestic wafer fabs are maintaining strong capital expenditure, with continued expansion of advanced logic and memory lines and increasing equipment value per unit due to process upgrades. This has driven rapid growth in orders and revenue for domestic equipment makers, reinforcing confidence in the self-sufficiency theme for semiconductor equipment and core components.

The memory sector posted exceptional H1 2026 results, with revenue of RMB 281.99 billion, a 389.89% year-on-year surge, and net profit attributable to shareholders soaring 14,912.95% to RMB 113.86 billion. In the second quarter, revenue grew 433.54% to RMB 177.52 billion, with net profit up a staggering 17,339.65% to RMB 75.36 billion. Sinolink believes that AI computing demand will continue to support high-end memory products like HBM and enterprise SSDs, while supply-demand dynamics for traditional DRAM and NAND are likely to remain tight.

The semiconductor design sector also delivered strong performance, with H1 revenue of RMB 79.72 billion, up 37.13% year-on-year, and net profit attributable to shareholders up 123.09% to RMB 19.22 billion. Second-quarter revenue rose 41.05% to RMB 45.19 billion, while net profit jumped 157.38% to RMB 13.28 billion. The acceleration of domestic AI accelerator chip shipments is being fueled by rapid iterations of large language models and expanding demand from both training and inference workloads. The brokerage argues that growth in AI computing demand and import substitution will remain key drivers for the semiconductor design sector.

Consumer electronics saw H1 revenue of RMB 1,184.50 billion, a 34.11% year-on-year increase, with net profit attributable to shareholders up 50.96% to RMB 49.78 billion. Second-quarter revenue grew 34.46% to RMB 643.26 billion, while net profit rose 55.13% to RMB 28.78 billion. The first half was marked by on-device AI driving software and hardware upgrades in smartphones, AI PCs, and wearables, alongside new product cycles that stimulated replacement demand and sustained sector momentum. Looking ahead to the rest of 2026 and into 2027, Apple's hardware innovations, AI smart glasses, and other new on-device AI products are expected to continue elevating value across the supply chain.

Risks to the outlook include weaker-than-expected terminal demand, slower-than-anticipated progress in AI technology iteration and commercialization, escalation of external sanctions, and rising upstream raw material costs that may not be effectively passed down the chain.