The semiconductor sector in Hong Kong stocks showed strength, with ILUVATAR COREX rising more than 21%. HUA HONG SEMI gained over 13%, while Montage Technology jumped more than 12%. AXERA and SMIC also advanced more than 8%.
On Tuesday Eastern Time, Goldman Sachs indicated that global technology stocks, including those in the U.S., appear broadly undervalued after an extended period of underperformance, presenting potential entry opportunities for investors.
Additionally, China Securities released a research report highlighting renewed U.S. efforts with the MATCH Act, expressing firm optimism toward achieving technological self-sufficiency. On April 2, U.S. Republican Congressman Michael Baumgartner, along with bipartisan lawmakers, formally introduced the Multilateral Alignment of Technology Control Hardware Act, known as the MATCH Act. A companion version was simultaneously proposed in the Senate, with House Select Committee on China Chairman John Moolenaar expressing clear support. Key provisions include: 1) A comprehensive ban on exports of key semiconductor manufacturing equipment to "countries of concern," including China, covering deep ultraviolet immersion lithography tools, cryogenic etching equipment, and other critical-node semiconductor manufacturing equipment; 2) Explicit designation of SMIC, HUA HONG SEMI, YMTC, CXMT, and their subsidiaries and affiliates as "restricted facilities," subject to full export restrictions; 3) Mandatory alignment of export control policies by allied nations within 150 days, requiring countries such as the Netherlands and Japan to bring their semiconductor equipment export controls in line with those of the U.S. The report suggests that as a bipartisan bill with recognition from both chambers, the MATCH Act stands a high chance of enactment. A notable addition is the emphasis on extraterritorial jurisdiction, compelling Japan and the Netherlands to align their semiconductor equipment export controls targeting China.
While the U.S. has already imposed strict controls on exports of advanced-node semiconductor equipment to China, policies from Japan and the Netherlands, though existing, have been less stringent. Previously, the focus was on "de-Americanization"; now, greater attention should be paid to "de-Japanization." Achieving complete self-sufficiency in semiconductor equipment is an inevitable trend, with lithography machines being a key area for future breakthroughs.
Overall, in terms of downstream capacity expansion, fab capital expenditures are expected to continue rising by 2026, with memory showing the strongest certainty and advanced logic likely maintaining robust performance. Regarding localization rates, downstream manufacturers are generally accelerating the verification and adoption of domestic equipment. The localization process for components, particularly modular parts, is expected to speed up. The sector's fundamentals remain positive, and current emphasis should shift toward reducing reliance on Japanese technology.
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