CITIC Securities has issued an investment strategy report for the second half of 2025, specifically targeting the semiconductor industry. The report highlights that the semiconductor cycle remains on an upward trajectory. Notably, the AI sector continues to exhibit robust growth, while the broader industrial sector has also embarked on a recovery path, supplanting consumer electronics as the primary growth engine. Looking ahead, AI is poised to be the principal driver of growth within the semiconductor industry, fueled by persistent demand for cloud-based AI solutions and the potential acceleration in the deployment of terminal AI applications. Chinese semiconductor manufacturers stand to gain substantially from the burgeoning AI industry. From an investment standpoint, focusing on listed companies, the strategy can be bifurcated into two primary avenues: prioritizing domestic substitution in cloud-based applications and capitalizing on downstream growth opportunities in terminal devices.