On July 14th, the leading domestic semiconductor thin-film deposition equipment manufacturer, Piotech Inc., experienced a dramatic and volatile trading session, leaving investors reeling. The stock surged 11% in the afternoon, bringing joy to many, only to be brutally sold off by 10 percentage points in the final seven minutes of trading, ultimately closing with a mere 0.59% gain. This prompted outcries from retail investors, who accused the market of manipulation and vowed to report the incident.
Piotech Inc., founded in April 2010 and headquartered in Shenyang, Liaoning, operates production bases in cities including Beijing, Shanghai, Haining, and Qingdao. The company specializes in the R&D, production, sales, and technical services of high-end specialized semiconductor equipment, with a primary focus on thin-film deposition equipment and advanced bonding equipment for 3D integration, along with supporting measurement and inspection tools. Its product portfolio includes PECVD, ALD, SACVD, HDPCVD, and Flowable CVD thin-film deposition systems, as well as 3D integration equipment like wafer-to-wafer hybrid bonding, wafer-to-wafer fusion bonding, and chip-to-wafer hybrid bonding. These products are widely used in logic chips, memory chips, power devices, Micro-OLED, silicon photonics, and CMOS image sensors (CIS).
The company's core product, PECVD equipment, is a fundamental machine in chip manufacturing. Its primary function is to heat a silicon wafer to a predetermined temperature, then use radio frequency electromagnetic waves as an energy source to create a low-temperature plasma above the wafer. By introducing appropriate chemical gases, a series of chemical reactions activated by the plasma forms a solid thin film on the wafer's surface.
In 2025, Piotech Inc. reported revenue of 6.52 billion yuan, a year-on-year increase of 58.87%, with net profit attributable to shareholders reaching 927 million yuan, up 34.67%. Its PECVD series equipment generated sales revenue of approximately 5.142 billion yuan, surging 75.27% year-over-year. Guoyuan Securities forecasts that PECVD will remain the primary driver of the company's revenue growth in 2026, with revenue potentially nearing 6.7 billion yuan, an increase of about 30%. Huaxin Securities noted that in areas like 3D packaging, Chiplet, and heterogeneous integration, hybrid bonding technology enables high-density integration of chips with different functions, overcoming the physical limitations of single-chip process advancement, creating a scenario where demand for hybrid bonding equipment is resonating across multiple fields.
Piotech Inc. is one of the few domestic manufacturers capable of mass-producing thin-film equipment for 14nm and more advanced process nodes. Its client base covers nearly all major domestic fabs, including SMIC, Yangtze Memory Technologies, and ChangXin Memory Technologies, positioning it to benefit deeply from the semiconductor localization trend.
This year, fueled by the global memory supercycle and a semiconductor rally in June, Piotech Inc.'s stock price has been on a tear, soaring 158% year-to-date and over 400% in the past year. At its elevated valuation level, the company announced plans to acquire 82.97% of Wuxi Shangji, 100% of Shanghai Tainawi, and 100% of Wuxi Kuanxing through a combination of share issuance and cash payments. It also plans to raise supporting funds by issuing shares to no more than 35 specific investors. Post-transaction, Piotech Inc. will wholly own Wuxi Shangji. This acquisition is intended to expand the company's product line beyond its primary PECVD focus to cover more thin-film deposition processes, creating a more comprehensive semiconductor equipment portfolio.
While the acquisition itself is positive news, the semiconductor sector has seen a sharp correction since late June. Leading chip stocks like Gigadevice have fallen over 30%. On its first trading day after the trading halt, Piotech Inc. itself experienced extreme volatility, nearly hitting a 20% down limit before finally closing in the green. Today's late-session surge initially seemed like a major win, but the subsequent frantic sell-off erased the entire day's gains. For a major stock with a market cap of 250 billion yuan to be slammed down 10 points in minutes during the final session is, by any measure, highly unusual. As it is listed on the STAR Market, where one board lot is 200 shares, buying just one lot at the opening price would require approximately 170,000 yuan, indicating participation is dominated by large investors.
This event triggered furious reactions from retail investors online. Some called for the incident to be escalated and reported, exclaiming, "This is no way to play the market!" Others pointed fingers at quantitative trading, stating, "If this wasn't done by quant funds, I refuse to believe it." Still others posed the poignant question: "Exactly what kind of institution is manipulating this? This market is truly abnormal, utterly abnormal."
Potential reasons behind the sharp sell-off
Analyzing the previous day's top trader data, the top four buying positions for Piotech Inc. were all institutional accounts, purchasing 4.7 billion yuan worth of shares. Foreign investors bought 600 million yuan. The net buying inflow was a substantial 1.6 billion yuan, indicating the buying was predominantly institutional. Considering the basic rules for stocks under a trading halt being included in indices, the late-session sell-off in Piotech Inc. could be attributed to two main scenarios.
Firstly, it might have been triggered by institutional selling. Following the 1.6 billion yuan institutional inflow at the previous session's close, approximately 900 million yuan in selling pressure today drove the stock from an 11% gain to nearly flat. During the closing auction, about 600 million yuan in buying provided support. This implies the total selling pressure was around 1.5 billion yuan. This amount, slamming a 250 billion yuan market cap stock down 10 points, accounted for roughly 10% of the day's total trading volume.
Secondly, it could represent arbitrage funds targeting ETFs and passive index funds. It is well-known that Piotech Inc., as a prominent semiconductor leader on the STAR Market, holds significant weight in various STAR Market indices. For instance, it constitutes about 4.35% of the SSE STAR Market 50 Index, corresponding to a market cap of around 247 billion yuan, with a free-float market cap of approximately 153.3 billion yuan. However, during the two-week trading halt starting June 26th, the broader tech sector experienced a collective sell-off, with the STAR Market 50 Index undergoing several bouts of extreme volatility. This created an environment where pessimistic or arbitrage-oriented funds were poised to sell aggressively upon its return.
During the halt, the cost basis for index funds tracking Piotech Inc. was set at 832 yuan. Fund companies were unable to purchase the stock during this period but were required to complete the necessary buying to rebalance their portfolios within two business days after trading resumed. With the recent sharp decline in the tech sector, a significant amount of capital fled the market at the open on the 13th. Piotech Inc. opened down as much as 18% that day, before likely being lifted into positive territory by substantial inflows from institutions or rebalancing funds. Given the T+2 rule for completing portfolio rebalancing purchases, a large amount of rebalancing capital or external bargain-hunting fund inflows entered the market again today, passively buying the stock. Meanwhile, some profit-taking funds that had positioned earlier seized the opportunity to distribute their holdings to these forced institutional buyers/index funds, achieving precise harvesting and arbitrage.
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