The Hong Kong stock market exhibited a volatile trading session throughout the day, with the Hang Seng Tech Index managing to turn positive in late trading. The era of chip inflation is dawning, as AI hardware continues to drive escalating demand for memory and computing power, propelling related semiconductor ETFs higher. Meanwhile, the South Korean stock market staged a dramatic recovery, leading to a collective rebound in related Korean ETFs. By the close, the Hang Seng Index had fallen 0.37% to 24,565.9 points, with a total turnover of HK$308.916 billion. The Hang Seng Tech Index rose 0.29% to 4,769.61 points. Among major Hong Kong-listed ETFs by size, the Tracker Fund (02800) closed down 0.32% at HK$24.9, while the CSOP Hang Seng Tech Index ETF (03033) gained 0.26% to HK$4.676. The CSOP 2x Long SK Hynix ETF (07709) surged 15.37% to HK$113.75.
Sector Performance
1. The arrival of the chip inflation era, fueled by AI hardware's relentless demand for memory and computing power, has driven strength across the related ETF sector. At the close, the Huatai-PineBridge China-Korea Semiconductor ETF (513310) soared 9.99% to RMB 5.779. The GF Semiconductor Equipment ETF (560780) jumped 8.39% to RMB 2.789, and the Cathay SSE STAR Market Semiconductor ETF (588170) advanced 8.37% to RMB 2.55. Market catalysts include concerns over tight memory chip supply sparked by rumors of Nvidia halving memory configurations, coupled with SK Hynix expanding production equipment to meet demand for sixth-generation High Bandwidth Memory (HBM4), which has boosted expectations for the semiconductor cycle. Regarding the Nvidia memory rumors, Morgan Stanley's view is that while Nvidia's reduction of VeraRubin rack memory configurations is real, the market's interpretation is the opposite. This move does not signal cooling AI demand but rather highlights a worsening DRAM supply shortage. Industry data from April shows DRAM and NAND sales and price growth hitting record highs, with memory remaining the biggest bottleneck for AI infrastructure. Based on persistently tight supply and demand, Morgan Stanley has significantly raised its revenue forecasts for the semiconductor industry and remains bullish on AI and memory supply chain leaders like Micron (MU.US), SanDisk (SNDK.US), and Nvidia (NVDA.US). Furthermore, Morgan Stanley stated that the era of chip inflation has arrived. The market has consistently underestimated one thing: AI doesn't just consume GPUs; its consumption of memory is even more astonishing. AI servers are gradually transforming from computing systems into storage systems. Morgan Stanley data shows memory chip prices have surged over sixfold in the past year, representing not a cyclical price increase but a classic structural shortage.
2. The South Korean market performed a dramatic "deep squat and jump," with the KOSPI Index soaring 8% in the afternoon session to reclaim the 8,000-point level, leading to a broad recovery in related Korean ETFs. By the close, the CSOP 2x Long SK Hynix ETF (07709) surged 15.37% to HK$113.75. The CSOP 2x Long Samsung Electronics ETF (07747) climbed 9.4% to HK$168.8, and the TR Korea ETF (02848) rose 8.85% to HK$1,936.5. Goldman Sachs noted that following the decline triggered by circuit breakers, the South Korean stock market is expected to rebound. In the long run, this will be a technical correction. Although it's a frightening pullback within a long-term bull market, the fundamentals remain very, very strong. Goldman Sachs believes speculative activity has increased in the current market, particularly among South Korean retail investors, especially those flocking to leveraged ETFs. Valuations in the South Korean market are very reasonable, and the firm expects underlying profits to continue driving growth. After the volatility, the market is expected to regain its footing and reach new highs. Additionally, market media reports indicate SK Hynix is introducing additional equipment for its Cheongju packaging and testing plant to meet HBM4 demand. Nvidia founder Jensen Huang also stated he would actively consider holding a GTC conference in South Korea, with multiple positive factors converging to boost market sentiment.
Institutional Perspectives
Huatai Securities research noted that against the backdrop of emerging overseas liquidity risks, from a short-term perspective, it is advisable to focus on sectors that faced heavier selling pressure in the previous adjustment while showing stabilizing profit expectations, such as discretionary retail and media, as well as high-dividend defensive plays like banks. Regarding the AI hardware supply chain, Huatai Securities believes it currently lacks strong conditions for absolute returns and outperformance. The next key window is the US earnings season in July. Therefore, it is recommended to adjust exposure based on floating profit levels, waiting for risk release and accumulation opportunities after volatility subsides. From a medium-term perspective, a balanced allocation is still advised, focusing on sectors with accelerating momentum like semiconductors, electric power and new energy, and machinery, as well as sectors with low valuations, stabilizing or upwardly revised profit expectations post-earnings season, and enhanced dividend attributes, such as catering and consumer services.
ETF Activity
On June 9th, six ETFs debuted for their first day of trading:
1. The E Fund Medical Devices ETF (159051) listed for the first time, closing down 0.10% at RMB 0.985, with a turnover of RMB 29.1359 million. The fund tracks the CSI All Share Medical Devices Index, covering companies involved in R&D, production, and sales of medical devices.
2. The GF Robotics ETF (159050) listed for the first time, closing up 0.66% at RMB 1.067, with a turnover of RMB 132 million. The fund tracks the SZSE Robotics Industry Index, covering areas such as industrial robots, service robots, and core components.
3. The Fullgoal Medical Devices ETF (159056) listed for the first time, closing up 0.10% at RMB 0.985, with a turnover of RMB 24.9984 million. The fund tracks the CSI All Share Medical Devices Index, focusing on listed companies in the medical device industry chain.
4. The Fullgoal Rare Metals ETF (159055) listed for the first time, closing up 4.23% at RMB 1.011, with a turnover of RMB 55.7347 million. The fund tracks the CSI Rare Metals Theme Index, investing in companies related to rare earths, lithium, cobalt, and other rare metals.
5. The Cathay Rare Metals ETF (159053) listed for the first time, closing up 4.52% at RMB 0.994, with a turnover of RMB 36.5615 million. The fund tracks the CSI Rare Metals Theme Index, covering sectors like rare metal mining, processing, and application.
6. The ChinaAMC Value ETF (159042) listed for the first time, closing down 0.71% at RMB 0.983, with a turnover of RMB 8.8628 million. The fund tracks the SZSE Value 100 Index, selecting low-valuation, high-dividend value leaders in the A-share market.
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