On June 15th, the Science and Technology Innovation Board chip sector showed strong momentum. The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190), which provides comprehensive exposure to the chip industry with a portfolio of core constituents, saw its on-exchange price rise over 4%. Leading heavyweight stocks performed well, with Hua Hong Grace Semiconductor Limited surging over 11%, Cambricon Technologies Corporation Limited climbing over 7%, Hygon Information Technology rising over 6%, and SMIC, Montage Technology both gaining over 4%.
On the news front, Chey Tae-won, Chairman of South Korea's SK Group, indicated that its memory chip subsidiary SK Hynix plans to increase chip wafer production capacity to three times the current level by 2034 to meet robust demand driven by artificial intelligence development. According to research from global technology market research and advisory firm Omdia, semiconductor revenue in Q1 2026 grew by 27% quarter-over-quarter compared to Q4 2025, reaching $319 billion. Memory was the primary driver of this growth, with a quarter-over-quarter increase exceeding 80% in Q1 2026.
Key Factors for the Sector's Strength
Analysts suggest that high-growth technology sectors remain a primary mid-to-long term allocation theme for the market. Focusing on a strategy of "technology rotation plus defensive allocation," the industry's positive momentum and underlying trends remain unchanged. The current technology rally is supported by genuine industry trends and earnings fundamentals, suggesting that sub-sectors with solid earnings support may continue to benefit. Short-term performance may exhibit rotational characteristics, with semiconductors being a key area to watch.
Exposure to the Chip Industry's Growth Cycle
For investors seeking exposure to the chip industry's potential growth cycle, high-beta instruments are an option. Public information shows that the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) and its feeder funds track the SSE STAR Market Chip Index. While offering balanced exposure across the chip industry chain, the ETF allocates over 90% of its weight to core areas like integrated circuits and semiconductor equipment, reflecting its high concentration in hard technology and aggressive positioning.
Cost Considerations for Investors
Public data indicates the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) has a management fee of 0.3%, a custody fee of 0.08%, resulting in a total expense ratio of 0.38%, which is relatively low among ETFs tracking the same underlying index.
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