Semiconductor stocks continued their upward trajectory in the afternoon session on the Hong Kong Stock Exchange. At the time of writing, HUA HONG SEMI (01347) surged 13.72% to HK$132.6, SMIC (00981) rose 11.97% to HK$76.7, GIGADEVICE (03986) advanced 11.46% to HK$671, and NOVOSENSE (02676) gained 10.98% to HK$230.4.
This rally is supported by news of accelerated IPO processes for two leading domestic memory chip manufacturers. On May 19th, the China Securities Regulatory Commission website showed that Yangtze Memory Technologies Co., Ltd. had filed a report for its initial public offering and listing tutoring, with CITIC Securities and China Securities as its sponsors. This follows closely after ChangXin Memory Technologies updated its prospectus on May 17th, reporting a staggering 1,688% year-on-year surge in net profit for the first quarter, which ignited significant market interest.
Notably, according to data from the World Semiconductor Trade Statistics (WSTS), global semiconductor sales are projected to reach $795.6 billion in 2025, marking a 26.2% year-on-year increase and one of the strongest annual growth rates on record, primarily driven by demand from data centers and AI-related systems. WSTS further forecasts that global semiconductor sales could surpass the $1 trillion mark in 2026.
Soochow Securities analysts point out that against the backdrop of exploding demand for AI computing power, the global semiconductor equipment market continues to scale new heights. On the advanced logic front, the transition from FinFET to GAA/CFET architectures, along with the move to 5nm and below process nodes, has significantly increased the capital equipment investment required per unit of capacity. The investment needed for a 10,000 wafers-per-month capacity is now several times higher compared to the 28nm node. In the memory sector, High Bandwidth Memory (HBM) is driving the upgrade to more advanced DRAM processes, while 3D NAND technology is evolving towards stacks exceeding 400 layers, leading to a concurrent rise in capital expenditure per 10,000 wafer capacity.
The analysts added that mainland China's share of global wafer production capacity still lags behind its share of semiconductor sales. With leading logic and memory manufacturers maintaining high levels of capital expenditure, coupled with the imminent IPOs and financing of the two major memory players, the momentum for capacity expansion is expected to persist. This supports a medium to long-term uptrend in the front-end semiconductor equipment sector.
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