With the continuous improvement of GPU computing power, the communication and network communication speed of server systems continue to increase, resulting in higher requirements for the performance of connectors and cables and corresponding price increases.
According to the report released by China International Capital Corporation, with the launch of the new generation Blackwell GPU and the upgraded NVLink 5.0/NVSwitch 4.0 GPU interconnect technology, as well as the ConnectX-8 InfiniBand SuperNIC network communication capability by Nvidia (NVDA.US), and the innovative NVL72/NVL36*2 architecture, China International Capital Corporation believes that it is leading the two major industry development trends of bus transmission rate improvement and server architecture upgrade, and has put forward higher requirements for the underlying hardware of communication buses, driving the demand for connectors and cables in terms of price and quantity.
Price increase: With the continuous improvement of GPU computing power, the communication and network communication speed of server systems continue to increase, resulting in higher requirements for the performance of connectors and cables and corresponding price increases. With the development of bus underlying SerDes technology towards 224G, the trend of upgrading communication buses, including InfiniBand and Ethernet rates to the 1.6Tb/s standard or even higher, drives the performance upgrade of high-speed I/O connectors and cable products used for providing data interfaces between external networks and computing devices.
Increased usage: With the significant increase in the number of GPUs interconnected by a single NVLink in a rack, the use of copper cables for NVL72/NVL36*2 can save 6 times the cost compared to the optical module solution, resulting in an increase in the quantity of backplane connectors and cables for a single machine. In the NVL73/NVL36 architecture, the ratio of high-speed backplane connectors to copper cables is 1:36:72. Compared with the DGX architecture, the demand for high-speed backplane connectors and copper cables increases by 5 times.
China International Capital Corporation calculates that the value of connectors and cables for a single NVL72/NVL36*2 solution is 0.72 million yuan / 0.78 million yuan, respectively. In addition to the increased demand for backplane connectors, China International Capital Corporation also observes changes such as the use of Mirror Mezz connectors instead of MCIO PCIe x16 connectors in the NVL72/NVL36 Compute tray, the use of jumper solutions instead of PCB wiring in the Switch tray, and the use of ACC and DensiLink cables for interconnection between two NVL36s. Taking into account the innovation in connection solutions between various components, China International Capital Corporation calculates that the value of connectors and cables for a single NVL72/NVL36*2 solution accounts for about 3-4% of the overall value.
Risk
Internet/telecom capital expenditure growth is lower than expected; AI industry demand is lower than expected; domestic supplier competitiveness is lower than expected.