AI technology continues to deepen its transformative impact on the manufacturing sector, with positive momentum expected to persist through the second half of the year.

Simultaneously, significant attention should be paid to the fresh growth avenues opening up for high-end equipment as AI transitions from infrastructure development to application deployment, particularly through embodied intelligence.

China is advancing technological breakthroughs across multiple fronts concurrently, with anticipated staged progress in these cutting-edge fields during the latter half of the year. This progress is expected to periodically catalyze market performance for related scientific research equipment and supporting apparatus sectors.

By the second half of 2026, demand for technological equipment, notably semiconductor and PCB manufacturing gear, is projected to sustain its growth trajectory.

Technology Equipment Leads in H1, Highlighting Structural Market Trends

As of July 6th, the CITIC Machinery Industry Index has gained 14.54% year-to-date, outperforming the CSI 300's 4.58% rise by 9.96 percentage points.

The market focus this year has been notably sharper compared to previous years, with capital clearly favoring "technology-oriented equipment."

High-end equipment within the broader semiconductor sphere, such as semiconductor front-end/back-end processing tools and PCB drilling pins/CNC drilling machines, has ridden the tailwind of AI computing infrastructure expansion to stage a powerful upward trend.

Supporting equipment for AI data centers, including gas turbines and efficient liquid cooling systems, has also demonstrated periods of outperformance.

AI's Reshaping Effect on Manufacturing Continues to Deepen

The firm has previously highlighted the profound implications of AI for manufacturing.

In the first half, driven by the construction and upgrade of AI data centers, sectors like semiconductor equipment, advanced PCB processing machinery, heavy-duty gas turbines, high-density power supplies, and liquid cooling temperature control systems experienced full order books, supply shortages, and even simultaneous increases in volume and price.

The firm judges that these favorable conditions are likely to continue into the second half of the year.

Concurrently, the shift of AI from the "infrastructure side" to the "application side" warrants close observation, as embodied intelligence unlocks entirely new incremental space for high-end equipment.

AI Infrastructure Poised to Drive Related Sectors into a Medium-to-Long-Term Upturn

Global tech giants continue to ramp up investments in AI computing clusters, driving a systematic recovery in demand for upstream chip manufacturing, packaging & testing, and supporting power/thermal management components.

Unlike previous equipment renewal cycles driven by military procurement, household appliance adoption, new energy installations, or automotive electrification, this AI infrastructure wave is characterized by a faster launch pace, broader supply chain impact, and a significantly higher market expectation ceiling.

It has the potential to become the largest growth cycle for China's high-end equipment sector to date.

Trends observed in H1, including semiconductor front-end capacity expansion, IC substrate/PCB production line upgrades, gas turbine unit replacements, and increased adoption of liquid cooling modules, provide initial evidence of this shift.

This trend is expected to deepen further in H2 as overseas CSP capital expenditures accelerate.

AI Applications Approach Industrialization Inflection Point

Embodied intelligence serves as the core vehicle for AI technology to move from the cloud into the physical world.

With the maturation of multimodal large language models and declining costs for edge-side computing power, the deployment of AI hardware in real-world scenarios is drawing nearer.

The firm views 2026-2027 as a critical window for the emergence of early AI applications.

End products like humanoid robots and AR/VR smart glasses are expected to move beyond early validation phases, transitioning from prototypes to mass production, thereby generating incremental demand for servos, reducers, micro-displays, sensors, and specialized assembly equipment.

The Scope of Tech Competition Extends Beyond AI

The evolution of AI reflects a microcosm of major-power technological rivalry, but strategic competition is not confined to artificial intelligence.

Frontier areas such as commercial aerospace, quantum computing, and experimental controlled nuclear fusion device construction are increasingly becoming non-negotiable domains for national technological security.

Leveraging significant engineer talent advantages and a comprehensive manufacturing supply chain, China is pushing for technological breakthroughs across these multiple tracks simultaneously.

Staged breakthroughs in these尖端 tech fields are anticipated in the second half, which are likely to periodically stimulate market activity for related scientific research equipment and supporting gear sectors.

Key Risk Factors

Potential risks include fluctuations in raw material prices, weaker-than-expected downstream demand, slower-than-anticipated progress in domestic substitution, international trade frictions, and exchange rate volatility.