On August 12, the semiconductor chip sector showed strength, with the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190), which is nearly half-weighted in memory chips and has a relatively low fee structure, rising 2.15% in early trading. The semiconductor equipment sub-sector led the gains, with Yuanjie Semiconductor Technology Co.,Ltd. (688498) surging over 7%, and other equipment companies advancing more than 5%. Optical chip stocks were also active, with both optical and technology names rising over 5%, contributing to the rally.
Overnight, US chip stocks posted broad gains, and today, South Korea's two major memory chip giants continued their upward momentum. According to media reports, SK hynix will restart investment in its second NAND flash memory production base in Dalian, aiming to expand local production capacity by approximately 50%. The company plans to complete the installation of semiconductor manufacturing equipment by the end of this year and commence mass production in the first half of next year. This follows previous reports that, amid a worsening global chip shortage, the "big three" memory makers—SK hynix, Samsung, and Micron Technology—have sold out their entire capacity for 2027.
Industry insiders point out that the supply gap for memory chips has already appeared in 2026, and it is expected to widen further in 2027, entering what they describe as the "most severe period" of short-term memory shortages. Additionally, Yuanjie Semiconductor Technology Co.,Ltd. announced plans to invest 4.268 billion yuan in building a semiconductor technology industrial park. The project aims to break through the company's existing capacity bottlenecks, expand the production scale of high-end laser chips, and promote the mass production and industrial application of high-end products.
On the policy front, the Shanghai Municipal Commission of Economy and Informatization recently issued the "15th Five-Year Plan" for the development of the software and information services industry in Shanghai. The plan focuses on core areas such as high-performance computing chips (GPU/NPU), quantum chips (QPU), high-speed optical interconnects (CPO), high-bandwidth memory (HBM), and heterogeneous servers, aiming to promote the deep integration of self-developed chips with mainstream large models.
With the continued increase in capital expenditures from the four major North American cloud providers and the ongoing commercialization of leading large-model companies, demand for AI computing power is expected to maintain a strong growth trajectory. This will sustain high levels of activity in sub-sectors along the AI computing chain, including AI chips, semiconductor equipment, and materials. China Merchants Securities noted that under the dual pressures of rapid AI development and foreign technology restrictions, the semiconductor chip industry is benefiting from both AI capital expenditure expansion and continued domestic policy support. This has led to rising industry chain activity and a gradual realization of income and profits for the sector.
*Investing in the "Super Cycle" of the chip industry: The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) and its linked funds (A: 021224, C: 021225) passively track the SSE STAR Chip Index. This index offers a balanced allocation across the entire chip industry chain, with over 90% weight in core areas like integrated circuits and semiconductor equipment, providing high exposure to hard technology and strong offensive potential. Public data shows that the fund's management fee is 0.3%, and the custodian fee is 0.08%, resulting in a total expense ratio of 0.38%, making it one of the lower-cost ETFs tracking the same underlying index.
*Data sources: Shanghai and Shenzhen stock exchanges, etc. Note: The memory chip content refers to the combined weight of the index components of the SSE STAR Chip Index that are also components of the Memory Chip Index (980138.CNI), which was 49.95% as of August 7. Institutional views sourced from China Merchants Securities report dated June 2, 2025, titled "AI Wave Combined with Domestic Substitution Presents a Year of Performance Realization for the Chip Industry."
*ETF fee-related note: When investors subscribe or redeem fund shares, the subscription or redemption agent may charge a commission of up to 0.5%, which includes fees charged by the stock exchange, depository, and other relevant institutions. Fee details for the linked fund: For the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND A share class, the front-end subscription fee is 1,000 yuan for subscriptions of 2 million yuan or more, 0.2% for subscriptions between 1 million and 2 million yuan, and 0.5% for subscriptions under 1 million yuan. The redemption fee is 1.5% for holdings of less than 7 days and 0% for holdings of 7 days or more. The C share class does not charge a subscription fee, but the redemption fee is 1.5% for holdings of less than 7 days and 0% for holdings of 7 days or more, with a sales service fee of 0.2%.
*Risk warning: The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) and its linked funds passively track the SSE STAR Chip Index, which was established on December 31, 2019, and listed on June 13, 2022. The annual returns for the index over the past five complete years are: 2021: 6.87%, 2022: -33.69%, 2023: 7.26%, 2024: 34.52%, and 2025: 61.33%. The annualized volatility over the same period is: 2021: 34.32%, 2022: 36.60%, 2023: 28.64%, 2024: 44.67%, and 2025: 34.34%. The composition of the index's constituent stocks is adjusted according to the index compilation rules, and historical backtested performance does not guarantee future index performance. This product is issued and managed by Huabao Fund, and the distribution agency does not assume any investment, redemption, or risk management responsibilities. Investors should carefully read fund legal documents such as the "Fund Contract," "Prospectus," and "Fund Product Information Summary" to understand the fund's risk-return characteristics and select a product suitable for their own risk tolerance. The fund manager evaluates the fund's risk rating as R4 (Medium-High Risk), suitable for investors with a suitability rating of C4 or above. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Past performance is not indicative of future results. Investment in funds carries risks. Investors should be cautious. Sales agencies (including the fund manager's direct sales and other sales agencies) conduct risk assessments of this fund based on relevant laws and regulations. Investors should promptly review the suitability opinions issued by the fund manager. The suitability opinions of different sales agencies may not be consistent, and the risk rating results issued by fund sales agencies may not be lower than the risk rating results issued by the fund manager. The fund's risk-return characteristics and risk rating in the fund contract may differ due to differing factors. Investors should understand the fund's risk-return profile, select a fund product based on their own investment objectives, term, experience, and risk tolerance, and bear the risks themselves. Registration of this fund with the China Securities Regulatory Commission does not imply a substantive judgment or guarantee of the fund's investment value, market prospects, or returns. Funds carry risks; invest with caution.
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