CPU Industry's 'Sellers of Shovels', LianTi Technology's Hong Kong Stock Soars Over 40% in a Week

Since the May Day holiday, Montage Technology has seen a surge in both A and H shares. Mainland China stocks jumped 14.82% on May 6, setting a new historical high, while Hong Kong stocks soared nearly 17% on the same day to 321.6 Hong Kong dollars. Since the first quarter report was released at the end of April, Hong Kong stock has accumulated a gain of over 40%.

First Quarter Revenue and Net Profit Reach All-Time High

First quarter revenue was 1.461 billion yuan, a year-on-year increase of 19.5%, with a net profit attributable to the parent company of 847 million yuan, an increase of 61.3%, both setting new quarterly records.

The most eye-catching figure is the gross margin, which is as high as 69.8%, up 9.3 percentage points year-on-year, with the gross margin for interconnect chips reaching 71.5%. The combined revenue of four new products was 269 million yuan, a year-on-year increase of 93.8%, and their proportion increased to 19%.

After the first quarter report, Citigroup immediately raised its target price for Hong Kong stocks from 205 Hong Kong dollars to 305 Hong Kong dollars, an increase of nearly 49%.

The real thread is the revaluation of CPU demand by Agent AI

AMD CEO Dr. Lisa Su clearly stated after the first quarter report that Agentic AI has seriously underestimated the demand for CPUs, and the CPU to accelerator ratio will shift from 1 to 8 to 1 to 1.

AMD raised its expectation for the TAM growth rate of server CPUs from 18% to over 35%, and provided guidance that second quarter server CPU revenue will increase by more than 70% year-on-year.

Intel is also facing supply tension in the distribution channels, with server CPUs having risen by about 20% since the beginning of the year. AMD stated that its capacity for 2026 has been sold out, and the demand-supply mismatch for high-end CPUs may continue until 2027.

Montage 8 to 24 Multiple Effect

Each CPU corresponds to 8 to 24 memory modules, depending on the CPU's channel architecture. Intel usually has 8 channels, while AMD EPYC has 12 channels. For every additional unit of CPU shipments, the demand for memory interface chips is amplified by 8 to 24 times.

Not only is the quantity increasing, but also the value per memory stick is soaring. Traditional standard memory sticks require only one interface chip per stick, while the next generation of high-performance memory sticks requires one controller chip plus more than 10 data buffer chips, with the value per stick jumping from the $10 range to the $100 range.

Intel's Reversal Constitutes an Additional Option

With Intel's new generation process yield improvement and clear roadmap, the strong promotion of high-performance memory solutions and high-speed interconnect technology routes align highly with Montage's product layout.

Intel's roadmap clearly advances the penetration of high-performance memory sticks from 2026 to 2030, forming a direct binding with Montage's products.

Montage's memory expansion controller chips have been included in the industry alliance's first batch of compliant suppliers list. The tested products from Samsung and SK Hynix all use Montage solutions.

From a Single Chip Supplier to an Interconnect Platform Company

Looking at the long term, the company is transforming from a memory interface chip supplier to a data center interconnect platform company. Memory interface is still the core cash cow, with a global market share of 36.8%, ranking first.

However, the high-speed signal relay chips have already become one of the top two globally, and the development of high-speed switching chips and Ethernet chips is in progress, with a potential market size that is 3 to 4 times the current size.

The self-developed high-speed serial interface IP can be reused across product lines, and the standard discourse power as a member of the industry standard organization's board constitutes an unreplicable barrier.