Looking back from the new starting point of 2025, we have experienced an extraordinary 2024 together. The global cable industry is undergoing structural changes: on the one hand, the AI ​​computing power revolution has spawned new opportunities, and the high-speed interconnection product line has maintained a compound growth rate of more than 30% for 18 consecutive months; on the other hand, the industry reshuffle has accelerated, and the profit margins of 78% of traditional cable categories have fallen below the 5% warning line. The high-speed interconnection supply chain is one of the product lines that currently maintains both profit and market growth. However, it is worth noting that the computing power arms race has entered a white-hot stage-the DeepSeeK algorithm revolution has compressed the computing power demand to 1/10 of ChatGPT, and NVIDIA has monopolized 83.7% of the global GPU market share with the H100/H200 series. This technological monopoly is triggering the reconstruction of the global supply chain. We have seen that Middle Eastern capital has set up a tens-billion-level GPU transit warehouse in South Korea through the Saudi sovereign fund, and India's Tata Group has jointly launched the "computing power corridor" plan with SoftBank. The domestic industrial landscape is also changing: H3C won a 15 billion high-speed order from Alibaba in a single month, Huawei's 8 billion AI server project was launched ahead of schedule, and the growth rate of the East China market was 42 percentage points higher than the traditional market in North China. This computing power revolution is reshaping our industrial landscape at an astonishing speed.

The most common application interfaces of high-speed interconnect cable harness components are SlimSAS, MICO, GEN Z, CXL, etc., all of which are dedicated to high-performance interconnect technology on the server side. Its mission is to enable processor-level bandwidth, from processor to system I/O to storage network, to traverse the entire data center, forming a unified neural network including server interconnection, server and storage interconnection, and storage network. These technologies are open standard high-bandwidth, high-speed network interconnection technologies. At present, their development speed is very fast, and more and more large manufacturers are joining or returning to its high-performance computer interconnection technology camp, so the demand for connected high-speed components is growing rapidly. In the existing resource library, there are 34 finished component factories. The difficulty of producing high-speed cable finished components is mainly to ensure the consistency and reliability of batch output. The difficulty lies in meeting the requirements of high transmission indicators, precise structural design and process control, high conductor requirements, material selection and cost balance, mass production and consistency, etc., to ensure stable performance during large-scale applications. 

According to the current market dynamics and industry analysis, the high-frequency and high-speed cable components used in AI servers have not yet seen a global overcapacity, but there is a structural contradiction, that is, insufficient supply of high-end products, and repeated investment in low-end technology may lead to local overcapacity risks. International giants occupy the high-end market and obtain the main profit space by relying on technology monopoly, while domestic enterprises compete fiercely in the mid- and low-end fields but have meager profits, and most of them are OEMs for the top four companies. In the future, with the acceleration of domestic substitution and technological breakthroughs, high-end production capacity is expected to be gradually released, but we need to be vigilant against the risk of local overcapacity caused by repeated investment in the low end. The following is a specific analysis:

Demand side: AI server growth drives a surge in demand for high-frequency and high-speed cables

Explosion of computing power demand

The rapid development of AI servers has put forward higher requirements for high-frequency and high-speed cable components. For example, the power consumption of a single cabinet of NVIDIA's AI server is close to 200kW, and may reach 1MW in the future, which puts higher requirements on the signal transmission rate, heat dissipation capacity and stability of the cable.

According to TrendForce's forecast, AI server shipments are expected to grow by 41.5% in 2024, and may still maintain a growth rate of 20%-35% by 2025, directly driving the growth of demand for high-frequency and high-speed cables.

Technology upgrade requirements

The interconnection standard of AI servers has evolved from PCIe 4.0 to PCIe 5.0/6.0, which requires higher transmission rates (such as high-frequency signals above 56GHz) and low-loss performance (low Dk/Df values) of cables. Traditional cables can no longer meet the requirements and need to rely on high-frequency high-speed cable assemblies.

Substitution and supplementary role

In short-distance connection scenarios (such as within a rack and between chips), high-frequency high-speed copper cables have become the mainstream choice for partial replacement of optical fibers due to their low cost and good compatibility. It is estimated that by 2027, the annual compound growth rate of high-speed copper cable shipments will reach 25%, and the market size will reach 20 million.

Supply side: insufficient high-end production capacity, low-end production capacity faces the risk of overcapacity

High-end products rely on imports and technical barriers

The core technologies of high-frequency high-speed cables (such as high-frequency signal integrity design and high-performance copper clad laminate materials) are still monopolized by international giants such as Amphenol and Tyco. Although domestic companies have made breakthroughs in the field of copper clad laminate resins (such as BMI and PPO), the large-scale production capacity of high-end cable assemblies has not yet been fully formed.

Low-end homogeneous competition

The traditional cable industry has a problem of low-end overcapacity. Some companies have tried to turn to the high-frequency and high-speed field, but due to insufficient technology, they have repeated low-level investments. In fact, high-speed lines are not as simple as you think. From structural design to production equipment, more attention needs to be paid to details, especially the requirements for equipment and process materials will be more stringent.

Market structure: structural imbalance and domestic substitution opportunities

Supply and demand mismatch

The high-end cable components in the global AI server market are still in short supply, especially for products such as 224Gbps SerDes and liquid-cooled compatible cables. International manufacturers have saturated orders and extended delivery cycles. However, due to technical and financial limitations, some domestic companies can only produce mid- and low-end products. The equipment investment after 6.0 is already at another level, resulting in local overcapacity.

Future trends: technology upgrades and industry integration

Technology iteration direction

High-frequency and high-speed cables will develop towards higher frequency bands and lower losses, and need to be compatible with liquid cooling systems. The popularity of cold plate liquid cooling will further promote the miniaturization and high-density design of cable components.