Xingye Leather Technology Co Ltd

A-share indium phosphide concept stocks rallied collectively on August 6. Bojie Co., Yunnan Germanium each hit their third consecutive daily limit up, Youyan New Materials rose for a second straight day, and Oulai New Materials, Xingye Technology, Suqian Liansheng, and Haite High-Tech were among the top gainers. The catalyst was Nvidia's forecast that global indium phosphide wafer demand will surge roughly 20-fold from 2026 to 2030. However, expanding indium phosphide substrate production is extremely difficult: a single production line requires over 1.2 billion yuan in investment, and the expansion cycle lasts three to five years, meaning new supply will lag far behind demand growth. Indium phosphide is a classic III-V compound semiconductor material with strong suitability for optical communications and high-speed electronic devices. The explosion in AI computing power demand is directly driving continuous expansion of its market size. The supply side faces rigid constraints. Indium is a rare dispersed non-ferrous metal, with about 90 percent of primary indium coming as a byproduct of zinc smelting. China holds the world's largest indium reserves, with proven reserves of about 20,000 tonnes, accounting for 75 percent of global recoverable reserves. China has also imposed export controls on indium phosphide and capped annual indium exports at no more than 30 percent of annual output. Multiple brokerages believe that upstream indium resources are subject to the dual constraints of being a byproduct and under export controls, and that indium phosphide substrates, as the most upstream manufacturing segment of the supply chain, are currently the most critical bottleneck in the AI optical module chain. The supply-demand imbalance is unlikely to ease in the short term, and upstream scarce resources as well as companies with large-size substrate mass production capabilities will benefit over the long term.