China's memory chip industry has achieved a historic milestone. A report released by market research firm Counterpoint Research on August 12 reveals that in the second quarter of 2026, Yangtze Memory Technologies Co. (YMTC) entered the global top three in NAND flash memory market shipment share for the first time. Samsung, SK Hynix, and YMTC captured 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 controls restricting access to advanced semiconductor equipment, this marks a key breakthrough for Chinese memory chip companies in the global competitive landscape.
Recently, technology research and consulting firm Omdia stated that as AI demand continues to outpace global supply capacity, driving strong growth in the DRAM and NAND markets, Omdia has raised its 2026 global semiconductor market revenue growth forecast to a year-on-year increase of 94.1%. At the same time, AI demand has already exceeded the current chip manufacturing and packaging capacity of the semiconductor industry. Bottlenecks in key areas such as high-bandwidth memory (HBM), advanced packaging, and advanced process capacity are expected to persist at least until 2027.
Where to start
China Merchants Securities pointed out that global CSPs' total capital expenditure in 2026 is expected to be approximately $830 billion, with the AI industry chain's prosperity continuing to rise. The supply-demand gap in the memory industry is expected to extend into 2027, with a clear trend of domestic memory expansion. The localization rate is expected to improve, equipment orders continue to be strong, and materials will see scaled growth after capacity bottlenecks are broken. It recommends focusing on memory benefiting from supply-demand tightness, computing power and foundry with sustained demand growth, and equipment materials in the expansion cycle, while also suggesting attention to core components of various science and technology innovation indices and semiconductor indices.
The upstream semiconductor equipment and materials industry, as the "shovel seller" in the AI era, may have long-term cyclical logic support, and has recently been actively receiving capital allocation. Data from Wind and exchanges show that the popular product, the Huatai-PineBridge Shanghai Stock Exchange STAR Market Semiconductor Materials and Equipment ETF (588710), has accumulated a net capital inflow of 79 billion yuan since July, with an average daily turnover of 2.1 billion yuan during the same period. This active capital allocation has boosted the ETF's latest scale to 11.26 billion yuan and its share count to 3.592 billion, with year-to-date growth of 1171% and 530% respectively.
Why just 10 ASX 200 shares?
The Huatai-PineBridge STAR Market Semiconductor Materials and Equipment ETF (588710) tracks the STAR Market 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 exposure of over 80% and an "advanced packaging" concept exposure of over 67%, giving it high sensitivity to memory chip expansion, wafer fab capital expenditure, and the domestic substitution process. Off-exchange investors can consider the Huatai-PineBridge Shanghai Stock Exchange STAR Market Semiconductor Materials and Equipment Theme ETF Feeder Fund (Class A: 024974 / Class C: 024975).
Historically, 100% STAR Market stock selection may give the index strong elasticity characteristics. In the past year, the STAR Market Semiconductor Materials and Equipment Index has accumulated a cumulative gain of 184%, outperforming the Semiconductor Materials and Equipment Theme Index (170%), the CSI All-Share Semiconductor Index (93%), the STAR Chip Index (117%), and the Guozheng Chip Index (84%), among other major semiconductor theme indices.
Semiconductor equipment and materials are a high-elasticity sector, and investors need to be aware of risks related to high valuations and trading volatility. Investors should make rational judgments and invest cautiously based on their own risk tolerance. It may be worth considering an allocation strategy, pairing with Huatai-PineBridge's "Dividend Family Bucket" to build a barbell layout—on the offensive end, capturing industrial dividends by positioning in high-growth technology tracks, and on the defensive end, aiming to smooth portfolio fluctuations through dividend-type assets. Huatai-PineBridge Fund is one of the first ETF managers in China, with over 19 years of deep experience in index investing, providing investors with index tools such as the Huatai-PineBridge CSI 300 ETF (510300) and the Huatai-PineBridge CSI A500 ETF (563360), which are transparent, convenient for trading, and have low expense ratios. As of the end of June 2026, the company's ETFs have generated profits of over 180.6 billion yuan for holders in the past two years, making it one of only three public fund companies in the A-share market to have accumulated profits exceeding 160 billion yuan during the same period.
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