AI-driven demand for computing chips and memory remains strong, fueling optimistic expansion plans at major global fabs and boosting the semiconductor equipment sector's outlook. Taiwan Semiconductor Manufacturing (TSMC) has raised its full-year capital expenditure forecast to $60-64 billion, while memory giants like Samsung Electronics, SK Hynix, and Micron Technology are also showing robust capital spending with large-scale expansion plans. On August 13, major domestic semiconductor manufacturers released Q2 2026 earnings reports, all exceeding market expectations, confirming the industry's high prosperity. Semiconductor equipment ETFs emerged as one of the rare sectors to attract net capital inflows last week, with strong trading volumes.
Domestic memory chips are steadily increasing their global market share. According to Counterpoint Research data, in Q2 2026, domestic manufacturer Yangtze Memory Technologies (YMTC) entered the top three globally for the first time in NAND flash memory market share by shipments. Samsung, SK Hynix, and YMTC held the top three spots with 25%, 22%, and 14% shares respectively, with YMTC surpassing Kioxia for the first time, while Micron ranked fifth. Against the backdrop of ongoing U.S. export restrictions on advanced semiconductor equipment, this marks a key breakthrough for Chinese memory chip companies in the global competitive landscape.
Ping An Securities notes that memory expansion in Mainland China is driving equipment demand, with the domestic substitution process progressing steadily. The large-scale expansion of memory fabs in Mainland China is expected to have immediate effects on equipment categories with high domestic substitution rates, such as thin-film deposition, etching, and cleaning. For equipment with lower domestic substitution rates, such as lithography, track, and ion implantation, there is an additional domestic substitution logic. Meanwhile, equipment demand is moving upstream, and supply chain security is promoting domestic substitution of equipment components, benefiting Mainland China's semiconductor equipment parts companies.
As the "shovel sellers" of the AI era, the semiconductor upstream equipment and materials sector may have a long-term prosperity logic, recently attracting active capital inflows. Wind and exchange data show that the popular product, the SSE STAR Semiconductor Equipment ETF (Huatai-PineBridge, 588710), has accumulated net capital inflows of 9.675 billion yuan over the past 40 trading days, with an average daily turnover of 2.095 billion yuan since August. This active capital allocation has driven the ETF's share count to 10.657 billion shares and its latest scale to 11.224 billion yuan, representing year-to-date growth of 1,770% and 1,167%, respectively.
The SSE STAR Semiconductor Equipment ETF (Huatai-PineBridge, 588710) tracks the SSE STAR Semiconductor Materials and Equipment Index, which focuses heavily on the upstream "materials + equipment" sectors of semiconductors, with a combined industry weight of 89%. Notably, the index has a "memory chip" concept weight of over 80% and an "advanced packaging" concept weight of over 67%, making it highly sensitive to memory chip expansion, wafer fab capital expenditure, and the domestic substitution process. Off-exchange investors can consider the Huatai-PineBridge SSE STAR Semiconductor Materials and Equipment Theme ETF Feeder Fund (Class A: 024974 / Class C: 024975).
Historically, the 100% STAR Market stock selection gives the index strong elasticity. Over the past year, the SSE STAR Semiconductor Materials and Equipment Index has risen by 182%, outperforming some mainstream semiconductor theme indices such as the Semiconductor Materials and Equipment Theme Index (169%), the CSI All-Share Semiconductor Index (93%), the STAR Chip Index (115%), and the Guozheng Chip Index (84%).
The semiconductor equipment and materials sector is a high-elasticity segment, and investors should be aware of risks related to high valuations and trading volatility. It is advisable to make rational judgments and invest cautiously based on individual risk tolerance. Consider a portfolio approach, pairing with Huatai-PineBridge's "Dividend Package" to build a barbell strategy—on the offensive side, allocate to high-growth tech sectors to capture industry dividends, and on the defensive side, use dividend assets to smooth portfolio fluctuations. Huatai-PineBridge Fund, one of the first ETF managers in China, has over 19 years of experience in index investing, offering investors transparent, easily tradable, and low-cost index tools like the CSI 300 ETF (Huatai-PineBridge, 510300) and the A500 ETF (Huatai-PineBridge, 563360). As of the end of June 2026, the company's ETFs have generated over 180.6 billion yuan in total profits for holders over the past two years, making it one of only three public fund companies in the A-share market with cumulative profits exceeding 160 billion yuan during that period.
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