[Huatai Securities: Optimistic About the Secondary Growth of Switch Chips Driven by AI Starting in 2026] DeepTech TechFlow reports that on May 24, Huatai Securities released a research report stating that as the core component for data center interconnection, switch chips are used for data exchange and packet forwarding, accounting for over 30% of the cost of switches. Huatai Securities is optimistic about the secondary growth of switch chips driven by AI starting in 2026: 1. Clusters with over 10,000 cards require more stable and reliable network systems, driving data center Scale-out switches toward higher capacity and speed. Scale-out switch chips are expected to see simultaneous growth in both volume and price. 2. Ultra-node architecture may serve as a breakthrough for domestic computing power to catch up with overseas capabilities. Ultra-nodes amplify the Scale-up effect within clusters, and the chip ratio for Scale-up is typically higher than for Scale-out, potentially generating significant demand for switch chips in the future. Huatai Securities estimates that the domestic switch chip market space could reach RMB 24.2 billion by 2028, with a CAGR of 96% from 2026 to 2028. It recommends paying attention to leading overseas companies and domestic chip manufacturers with advanced self-developed technologies.