As summer 2024 unfolds, the spotlight in China's technology sector has shifted away from high-profile company IPOs to a groundbreaking forecast by the AI research lab, DeepSeekTheir report, titled "2025 A-Share Technology Trend Forecast," is stirring up conversations among investors and industry leaders alikeBy meticulously analyzing over 100,000 patent documents, tracking investment behaviors of leading firms, and monitoring global industrial shifts, this report articulates a striking prediction: a historical "value reconstruction" is anticipated in China's technology landscape around 2025.

This prediction signals not only a pivotal moment for the tech industry but also a broader transformative phaseChina's technological evolution is seen as a journey from being a laggard to becoming a trendsetter in global standards and innovationsIn the late 1990s, the country was busy adopting and dismantling second-hand devices from JapanToday, however, Chinese firms are leading the charge in sophisticated sectors such as robotics and autonomous vehicles, highlighted by factories in Dongguan that are proudly exporting high-tech components to Germany.

Central to DeepSeek's analysis is a novel metric—the "conversion rate of R&D investment." Over the past five years, R&D intensity among A-share tech enterprises has surged from 3.2% to 7.8%. On the other hand, patents granted on the Science and Technology Innovation Board have seen an annual growth rate of 41%. Beneath these seemingly dry figures lies a story of an imminent critical inflection point for China's technology trajectory, promising an upward spike in its competitive edge on the international stage.

Amid this backdrop, the semiconductor industry shines brightly, boasting a staggering 32.7% probability of explosive growth according to DeepSeek’s modelThis revolution is not merely about indigenous alternatives; it encompasses a profound restructuring of technology pathways, commercial paradigms, and the overarching global division of labor

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Companies are reinventing their manufacturing and design processes, often in ways that align with global technological advancements.

Take, for instance, the strategic maneuvers among Chinese semiconductor firmsWhile global attention is fixated on the ultra-advanced 3nm process, domestic leaders are making strides in niche areasCompanies in Shenzhen are developing high-efficiency GaN (Gallium Nitride) power devices, achieving a remarkable energy conversion rate of 98.5%, becoming indispensable players in the supply chain for Tesla's charging stationsAnother example is an innovative chip design firm in Shanghai that has utilized 3D stacking technology to boost the performance of its 14nm chip to rival 7nm chips, thus enhancing its yield rate by 23%. Meanwhile, a lab in Hefei has created the world's first photonic storage-and-computation chip, which boasts an efficiency increase of 300 times compared to traditional designs.

One of the key differentiators in the semiconductor space is China's shift towards "co-evolution" within a robust, all-encompassing supply chainContrary to the vertical division model favored by international giants, local players are forming synergistic innovation clustersFor example, in the materials sector, a company in Shanghai has achieved an 85% yield in 300mm silicon wafers, enabling significant strides for SMIC in processes below 28nmEquipment manufacturers are transitioning into expansive roles; for instance, Northern Huachuang’s etching machines have doubled their usage in Yangtze Memory Technologies, reflecting a rise from 15% to 47% adoption ratesMoreover, innovative designs, such as the Cambrian 'Siyuan 370' chip, which has achieved a remarkable third in the global AI inference chip market, highlight the rapid advancements being undertaken.

Transitioning from semiconductors, let’s examine the renewable energy sector, which stands on the brink of a transformative phase as wellBy 2025, the new energy vehicle (NEV) industry in China is predicted to reach a turning point, especially when the share of global power battery sales is expected to exceed 70%. The competition will then delve deeper into establishing foundational technical standards.

The realm of battery technology is undergoing three significant revolutions

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For starters, breakthroughs in solid-state batteries are redefining landscape dynamics: Contemporary leading manufacturer CATL has initiated trials for sulfur-based all-solid-state batteries, achieving energy densities exceeding 400Wh/kgOn another front, BYD's sodium-ion battery strategy has yielded electric vehicles with ranges surpassing 350 kilometers while reducing costs by 30% compared to lithium batteriesIn addition, the emergence of the "battery bank" model led by NIO is reshaping automotive financing, boasting a valuation over 20 billion yuan.

Moreover, the intelligence sector is witnessing an impactful "dimension-reduction strike," with some emerging brands boasting centralized computing platforms that outperform Tesla’s HW4.0 by 2.3 timesThe remarkable advantage lies in their ability to leverage OTA (over-the-air) upgrades to enhance lidar functionalities, which has resulted in a 58% improvement in their customer repurchase ratesBy also opening up vehicle computational power to third-party developers, these platforms are fostering a renaissance of innovation, sparking new ventures in car karaoke and augmented reality navigation.

Artificial intelligence, too, is undergoing a paradigm shift as articulated in the DeepSeek reportThe term "landing" appears seventeen times in this chapter, reflecting a transition from academic accolades to tangible value creation across industriesFor example, an appliance giant has integrated AI visual inspection systems that drastically reduced defect rates from 0.3‰ to 0.05‰, while a Zhejiang fiber company has leveraged molecular modeling algorithms to reduce material development times from 18 months to 5 monthsSimilarly, introducing an intelligent scheduling system at ports in Shenzhen has amplified container turnover efficiency by 40% while minimizing carbon emissions by 12%.

Yet another transformative aspect is the evolution of business modelsWhile OpenAI fiddles with subscription fees, Chinese AI companies have swiftly established three localized pathways to commercialization

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In the burgeoning arena of digital employees, a banking institution reportedly employed 500 AI loan officers, leading to a 92% accuracy rate in identifying non-performing loansMeanwhile, AI firms in healthcare are creating innovative leasing models for diagnostic systems, sharing profits based on effective inquiriesAdditionally, platforms like iFlytek's AI learning machines are serving over 2,700 county-level markets with renewals surpassing 85%.

For investors, the anticipated wave of tech stocks is prompting a reevaluation of valuation frameworksNotably, a shift from traditional price-to-earnings (P/E) ratios to enterprise value to revenue (EV/Rev) metrics illustrates a renewed focus on the worth of R&D effortsCase in point, one AI chip company, with nearly half of its revenue allocated to R&D, may show a negative net profit when evaluated using P/EHowever, under EV/Rev scrutiny, its valuation leaps to tenfold, indicating a robust market belief in its technological fortitude.

Furthermore, a pivot from a singular sector focus to a comprehensive ecosystem approach is emerging as essential in mitigating risksIdentifying companies' "node values" within the industrial chain proves more critical than merely promoting singular sectorsA semiconductor equipment manufacturer that has tightly allied itself with local wafer foundries while strategically investing in upstream material companies, constructing an “equipment + materials” innovation network, demonstrates a resilience against market volatility that outpaces conventional businesses.

Though the rewards of domestic replacement strategies remain potent, the eyes of discerning investors are increasingly focused on companies already achieving technical exports to international marketsOne electric vehicle battery enterprise not only captures the largest domestic market share but has approached joint ventures to establish themselves in Europe, climbing overseas revenue from 3% to 27%. Such globalization positions these firms to reap various market advantages.

In conclusion, the insights presented in DeepSeek's forecast are far from naive aspirations

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