NVIDIA INNOVATES TECHNOLOGY TO BUILD AI SUPER FACTORY! Which companies are most likely to benefit from the plunge?

August 22, $NVIDIA(NVDA.US)$ Spectrum-XGS Ethernet technology was unveiled at the Hot Chips convention, which aims to integrate multiple data centers into a “billion-watt AI superfactory” through cross-regional connectivity, breaking the power and energy constraints of a single data center.

“The AI industrial revolution has arrived, and the giant AI factory is the core infrastructure of this transformation,” said Huang Yen-Hun. After scale-up and scale-out technologies, we are bringing together data centers across cities, countries and continents into a massive billion-watt AI superfactory with the introduction of NVIDIA Spectrum-XGS Ethernet, offering Scale-across technology.”

Seeing this, many investors may be wondering what scale-across is? Which companies are expected to benefit? Let's interpret them one by one next.

What is Scale-Across?

In the past, AI cluster expansion has mainly followed two paths: Scale-up, deploying more GPUs in a single cabinet; and scale-out, enabling more cabinets to be interconnected within a single data center. However, limited to physical conditions such as electricity, cooling, and land, relying solely on Scale-up and Scale-out cannot achieve unlimited expansion of cluster scale.

Spectrum-XGS Ethernet breaks through the introduction of a Scale-Across infrastructure. Scale-across becomes the “third pillar” of AI computing after Scale-up and Scale-out, enabling the high-performance and scale-out capabilities of Spectrum-X Ethernet to extend to multiple distributed data centers, building a billion-watt, intelligent, mega-AI superfactory.

Under the name of NVIDIA, Spectrum-XGS Ethernet is based on a cross-domain expansion framework that provides a custom network protocol that can be dynamically adjusted based on the distance between data centers:

1. Adaptive distance congestion control: dynamically optimize network transmission between data centers;

2. Precise latency management: improved NCCL library performance by almost two times;

3. END-TO-END TELEMETRY SYSTEM: ENSURES PREDICTABLE PERFORMANCE OF GEOGRAPHICALLY DISTRIBUTED CLUSTERS.

Which companies are expected to benefit?

The launch of Spectrum-XGS marks a key milestone in AI power networking's progress towards normative modeling and scalability. In the context of the continuous development of artificial intelligence applications, high-speed interconnection technology and bundled heat dissipation Industry Chains are hoping for a new round of growth.

The super AI power center is shaping up to be a major development direction in the future. With the continued demand for high-speed data interfacing, Fiber Optic, High-Performance Switches, and Liquid-Cooled Thermal Technology are expected to grow in the coming years to build the core backbone of the next infrastructure facility.

Beef & Beef Stewards Benefit from Industry Related to the Hong Kong American Stock Market and Provides Investor Reference:

Let's see specifically:

— Optical communication technology upgrade

Hong Kong and US Stock Market Contains $Coherent(COHR.US)$ 、 $Lumentum(LITE.US)$ 、 $Applied Optoelectronics(AAOI.US)$ 、 $Fabrinet(FN.US)$ 、 $Ciena(CIEN.US)$ 、 $Credo Technology(CRDO.US)$ 、 $Astera Labs(ALAB.US)$ 、 $Corning(GLW.US)$ 、 $Lumen Technologies(LUMN.US)$ $YOFC(06869.HK)$ Other companies.

Among them, the Fiber Optic Industry receives the most attention. The gap fiber is considered to be the most long-term development elasticity, technical background and extremely high profitability in the Scale-Across trend. Compared to traditional single-mode fiber, the gap fiber can show 30% lower time delay, reduce signal attenuation by more than 50%, for better performance display.

According to Chinese media, Microsoft and Agora are accelerating the advancement of optical fiber, and this year's purchase volume is expected to increase from the current quadrillion kilometers to the next 17 million kilometers. Ultra-high optical fiber wallpaper, $YOFC(06869.HK)$ It is the core of the country. Thanks to the NVIDIA Spectrum-XGS news, the company grew by almost 27% today and increased by 293 percent in the previous year.

In addition, as a global fiber inventor and technology leader $Corning(GLW.US)$ With the same value in mind, the company's growth forecast is close to 40% this year and shows advantages in the field of high-end optical communications products. Compared to long-haul optical fibers, Corning has an advantage in brand resonance, materials science, and global market measurement tools, especially in the high-end market in North America.

Moreover, the Technical Indicator in the field of new interest in aerospace fiber has partly surpassed Corning, and is more advantageous in terms of production cost and emerging markets.

Fiber Optic Company $Lumen Technologies(LUMN.US)$The share price rose more than 190% last year, but this year's performance was not as expected, with a 13% drop over the year.

Lumen announced a partnership with Microsoft in July, revealing that Lumen's Private Connectivity Fabric is a custom network that allows dedicated access to existing fiber in the Lumen network, installing new fiber on existing and new routes, and using Lumen's new digital services.

As data demand increases, this AI-enabled infrastructure will enhance connectivity between Microsoft data centers by providing customers with the network capacity, performance, stability, and speed they need.

Silicon and CPO Technology: Spectrum-XGS relies on high-bandwidth, low-power optical interconnection, and CPO (Co-Encapsulated Optics) technology integrates the light engine with switching chips, reducing laser usage by 75% and increasing energy efficiency by 3.5x.

U.S. Optical Modules Corporation $Coherent(COHR.US)$ versus $Lumentum(LITE.US)$ Today's share price performance showed a sharp drop of 5% and a large increase of 42%. Current JPMorgan Research Reports indicate that the CPO (Co-Encapsulated Optics) Industry Chain is growing closer to growth and sees Coherent and Lumentum as the fundamental outlook for optical component heads. JPMorgan is expected to strengthen, CPO technology will enter a quantitative phase in the next half of 2025, and a modulation transition period in 2027, and the growth rate will be faster in line with any technology in the field of optical communications.

In addition, the American manufacturer of light modules $Applied Optoelectronics(AAOI.US)$ , AI data center giant Optomon $Fabrinet(FN.US)$ 、Optical network giant $Ciena(CIEN.US)$ , U.S. Semiconductor and Optical Equipment Company $Credo Technology(CRDO.US)$ SMALL NVIDIA $Astera Labs(ALAB.US)$ Equally worth paying attention to.

Switch Industry

Spectrum-XGS brings NVIDIA's unified communications capabilities nearly a notch to the next level, accelerating the communication capabilities of multiple GPUs and multiple points, making it possible to predict the performance of native AI groups.

Investors Can Note Data Center Industry Chain Chain-Switchfaucets $Arista Networks(ANET.US)$ 、 $Cisco(CSCO.US)$ 、 $Celestica(CLS.US)$ , You can follow in the country $ZTE(00763.HK)$ ; furthermore, $Broadcom(AVGO.US)$ 、 $Marvell Technology(MRVL.US)$ Owns and Related Industries.

— Liquid cooling equipment

Liquid cooling is becoming a key solution for data center cooling as the demand for AI computing grows. $Vertiv Holdings(VRT.US)$ 、 $nVent Electric(NVT.US)$ Enterprises such as these will benefit from the liquid cooling needs of data centers.

— Data Center Operators

Spectrum-XGS technology not only solves the bottleneck of data center scalability, but also brings significant economic benefits and competitiveness to data center operators by optimizing network performance, reducing costs, and driving industry ecology.

Therefore, large-scale data center operators such as $Microsoft(MSFT.US)$ 、 $Amazon(AMZN.US)$ 、 $Alphabet-A(GOOGL.US)$ 、 $Meta Platforms(META.US)$ 、 $Oracle(ORCL.US)$ 、 $CoreWeave(CRWV.US)$ It is also worth paying attention to.

Currently, supermodel vendors such as CoreWeave have begun rolling out this new infrastructure facility that can combine multiple data centers into a single Supercomputer with NVIDIA Spectrum-XGS to provide customers with a Tier II AI system.

As a whole, the introduction of Spectrum-XGS technology benefits not only NVIDIA's own Industry Chain, but also new growth momentum across the entire field of computing infrastructure facilities.