On May 24th, a research report from Huatai Securities highlighted that switch chips, essential for interconnecting data centers, play a pivotal role in data exchange and message forwarding, constituting over 30% of the total cost of switches. Huatai Securities anticipates that, propelled by AI technology, switch chips will embark on a fresh wave of growth starting in 2026. On one hand, clusters with tens of thousands of cards impose stricter demands on the stability of network systems. This will spur the development of data centers' Scale-out switches towards higher capacity and speed, thereby driving up the demand for Scale-out switch chips and achieving growth in both volume and price. On the other hand, the super-node architecture is poised to become vital for domestic computing power to bridge the gap with overseas counterparts. Super-nodes will amplify the significance of Scale-up within clusters, and typically, the proportion of switch chips in super-nodes is higher than that in Scale-out configurations, potentially creating substantial future demand for switch chips. Huatai Securities projects that the domestic switch chip market could expand to RMB 24.2 billion by 2028, with a compound annual growth rate (CAGR) of 96% from 2026 to 2028. It is prudent to keep an eye on leading overseas companies and domestic chip enterprises that boast cutting-edge self-developed technologies.