DDR5 市场渗透率已进入高速增长期，2024 年全球DDR5 市场渗透率约为40%-50%，2025 年预计增长至65%。同时DDR5 内存接口芯片将在今年进行子代迭代，DDR5 第二子代将取代第一子代成为市场主力，预计随着PC 大厂新机的发布，2024 年下半年DDR5 第三子代RCD 的市占率将逐步提升，产品迭代期新产品的入市将带动公司接口芯片ASP上行。DDR5 接口芯片市场呈现三足鼎立的格局，公司已率先推出DDR5第一至第四子代RCD 芯片，在DDR5 接口市场内具备竞争优势。新品入市叠加市场需求逐步复苏推动公司DDR 接口芯片实现量价齐升。Key points:
Connected chip design leader, covering the complete DDR2-DDR5 solution, forward-looking layout in the field of high-speed transmission
The company is deeply involved in the field of connected chip design and is committed to providing high-performance, low-power interconnected chip solutions for cloud computing and artificial only fields. It is a member of the board of directors of the JEDEC Solid-State Technology Association, a global microelectronics industry standard setting agency, and is deeply involved in the formulation of standards for JEDEC related products; leading DRAM companies Samsung Electronics, Hynix, and Micron Technology are all customers of the company.
The DDR5 market penetration rate has entered a period of rapid growth. The global DDR5 market penetration rate is about 40%-50% in 2024, and is expected to grow to 65% in 2025. At the same time, DDR5 memory interface chips will undergo sub-generation iteration this year, and the second generation of DDR5 will replace the first generation as the main market force. It is expected that with the release of new models from major PC manufacturers, the market share of DDR5 third-generation RCDs will gradually increase in the second half of 2024, and the entry of new products into the market during the product iteration period will drive the company's interface chip ASP upward. The DDR5 interface chip market shows a three-legged pattern. The company has taken the lead in launching DDR5 first to fourth generation RCD chips, which have a competitive advantage in the DDR5 interface market. The entry of new products combined with the gradual recovery in market demand has driven the company's DDR interface chips to achieve a sharp rise in volume and price.
In the application of DDR5 LRDIMM, Lanqi uses a “1+10” architecture. One DDR5 RCD chip needs to be equipped with ten DDR5 DB chips; SPD, TS, and PMIC supporting chips are also required. These supporting chip companies have all achieved self-development, benefiting from the rising penetration rate of the DDR5 module market, and shipments of SPD, PMIC and TS chips will grow simultaneously.
Demand for PCIe Retimer chips is showing a “rigidity” trend. Currently, a typical mainstream AI server with 8 GPUs requires 8 or 16 PCIe 5.0 Retimer chips, while a server with 4 GPUs requires 4 to 8 PCIe Retimer chips. Lanqi is one of the three companies in the world to mass-produce PCIe 4.0 Retimer chips; in the PCIe 5.0 era, the company mass-produced PCIe 5.0 Retimer chips in January 2023, making it the second manufacturer in the world to mass-produce this product. We expect the global PCIe Retimer market to reach about 0.5 billion US dollars in 2024, with a market size growth rate of about 39%; a growth rate of about 36% in 2025; and a growth rate of about 40% in 2026.
DDR5 6400MT/s and above are usually equipped with high-performance CPUs. With the introduction of AI PCs, the market share of high-performance PCs will increase, thereby driving the growth in demand for DDR5 memory interfaces and CKD chips. The company's CKD chip development is at the forefront of the industry. It is expected that from 2025, CKD chips will benefit from a wave of switching, and market demand may reach 0.2 billion in the next 2-3 years. The market size of CKD chips is expected to grow to 0.5 billion dollars by 2027.
The company has a forward-looking layout of MRDIMM and MXC chip research and development. MRDIMM is suitable for most edge computing scenarios for data storage and pre-processing in the AI industry. The edge computing market size has entered a period of rapid growth. IDC expects global edge computing spending to reach 232 billion US dollars in 2024, an increase of 15.4% year over year. The compound annual growth rate of the global edge computing hardware product market is about 11% from 2022 to 2027. Under the challenges and market opportunities of the server memory industry, the global CXL market is expected to enter the initial phase in 2025; the global CXL market will be 2.1 billion US dollars in 2026, and the global CXL market will reach 15.8 billion US dollars in 2028.
Investment advice
We expect the company's net profit to be 1,416 million yuan/2448 million/3,425 million yuan in 2024-2026, with net profit growth rates of 214%/72.9%/39.9%, respectively; in 2024-2026, the company's EPS will be 1.24 yuan/2.14 yuan/3 yuan respectively. Corresponding to the closing price of 59.26 yuan on August 1, 2024, the company's PE for 2024 to 2026 was 47.82 times/27.65 times/19.77 times, respectively. The storage cycle bottomed out and increased mass production and shipment of new products, driving the company's performance upward, and there is plenty of room for growth. The first coverage gave the company an “additional” rating.
Risk warning
The downstream demand recovery process fell short of expectations, and the AI PC market penetration rate increased more slowly than expected, resulting in a slower than expected increase in the DDR5 interface chip market penetration rate. The company's R&D progress fell short of expectations, and the company's DDR5 fourth-generation chip and MXC new product development and mass production were slower than expected. The increase in the company's upstream supply-side prices was higher than expected. Competition in the downstream market has intensified, and competition in the short to medium term storage market has led to an increase in the company's product market share and sales prices falling short of expectations.
