Core View: The AI wave is propelling the global memory chip industry into a super-cycle characterized by both rising volumes and prices. Concurrently, the accelerated capacity expansion of China's leading memory manufacturers (Yangtze Memory Technologies Co., Ltd. and ChangXin Memory Technologies Inc.), coupled with the strategic imperative for a self-sufficient and controllable supply chain, is creating definitive high-growth and high-volatility opportunities for upstream domestic semiconductor equipment, materials, and component sectors. Regarding investment tools, the underlying index of the Huabao Hang Seng Stock Connect Information Technology ETF (159131) has a "memory chip" concentration exceeding 26%, making it an efficient instrument for gaining exposure to Hong Kong-listed hard tech.
I. The Fundamental Logic of Memory Chips: The "Physical Foundation" and "Data Warehouse" of the Digital Economy Memory chips serve as the "data warehouse" of the digital economy. Compared to traditional storage, semiconductor memory offers advantages like extreme speed, low power consumption, and shock resistance. It is categorized into volatile memory (RAM, focused on high-frequency operation) and non-volatile memory (ROM/Flash, for high-capacity, permanent storage).
II. Core Categories and Market Structure: DRAM and NAND Flash Dominate The global semiconductor memory market features a highly concentrated product landscape. DRAM (the "high-speed workbench" for computing systems) accounts for 58%-65% of the market, NAND Flash (the "super digital warehouse") for 40%-43%, and NOR Flash for 2%-3%. Together, these three categories command approximately 97% of the market share.
III. The Memory Hierarchy: The Ultimate Balance of Speed, Capacity, and Cost Modern computer systems employ a rigorous pyramid-shaped memory hierarchy to address the challenge that no single technology can perfectly balance speed, capacity, and cost. From the top (closest to the CPU) to the bottom, the hierarchy consists of: CPU internal registers, SRAM cache, DRAM main memory, and NAND/HDD external mass storage. As distance from the CPU increases, access speed decreases progressively, but storage capacity expands exponentially while unit cost drops significantly.
IV. Industry Cycle and Competitive Landscape: A Historic Opportunity for Domestic Substitution Amid Oligopoly Memory chips exhibit strong cyclicality and highly standardized "commodity" attributes. Extremely high capital expenditure and technological barriers have resulted in a global oligopolistic structure. Currently, the DRAM market is dominated by Samsung, SK Hynix, and Micron, with a combined market share (CR3) exceeding 95%. The top five players in the NAND market hold a combined share of 92.7%. Facing this foreign giant monopoly, Chinese domestic enterprises, represented by Yangtze Memory Technologies Co., Ltd. (3D NAND), Hefei ChangXin Memory Technologies Inc. (DRAM), and GigaDevice Semiconductor (Beijing) Inc. (NOR Flash), are accelerating their technological breakthroughs, driving a robust trend of import substitution.
V. China's Memory Chip Sector: Five Leaders Securing Key Positions As the sole domestic foundry with 14nm and below manufacturing capabilities, Semiconductor Manufacturing International Corporation (SMIC), alongside Huahong Semiconductor Limited, a leader in specialty processes, solidifies the capacity foundation. GigaDevice Semiconductor (Beijing) Inc. achieves full coverage across NOR, NAND, and DRAM. Fudan Microelectronics Group Co., Ltd. specializes in high-reliability storage for special applications. Montage Technology Co., Ltd. monopolizes the memory interface chip market with a 36.8% share. These five core enterprises have built formidable barriers in their respective segments, comprehensively advancing the process of domestic self-sufficiency and control.
VI. Hang Seng Stock Connect Information Technology: A One-Click Access to Hong Kong Hard Tech with Over 26% Memory Chip Exposure The Hang Seng Stock Connect Information Technology Composite Index (HKD) is composed of "70% hardware + 30% software," heavily weighted towards Hong Kong-listed "Semiconductor + Electronics + Computer Software" stocks. It covers 52 Hong Kong-listed hard tech companies, with a memory chip concentration exceeding 26%. Constituents include Semiconductor Manufacturing International Corporation (SMIC) (weight: 14.48%), Huahong Semiconductor Limited (weight: 8.61%), Montage Technology Co., Ltd. (weight: 1.14%), Fudan Microelectronics Group Co., Ltd. (weight: 1.06%), and GigaDevice Semiconductor (Beijing) Inc. (weight: 0.9%). Notably, it excludes large-cap internet firms like Alibaba, Tencent, and Meituan, offering higher thematic focus.
Currently, there are 7 ETFs tracking this index in the market. Among them, the Huabao Hang Seng Stock Connect Information Technology ETF (159131) boasts the largest scale and strongest liquidity, while also supporting T+0 trading. Its corresponding feeder fund code is 026755, providing a tool for capturing the AI hard tech trend in Hong Kong with a single transaction.
Note: The phrase "first in the market" refers to the Huabao Hang Seng Stock Connect Information Technology ETF being the first ETF to track the Hang Seng Stock Connect Information Technology Composite Index. As of May 19, 2026, the latest on-exchange scale of the Huabao Hang Seng Stock Connect Information Technology ETF was 775 million yuan, the largest among the 7 ETFs tracking the index. Its average daily turnover year-to-date was 166 million yuan. The historical annual returns of the underlying index (HKD) for 2021-2025 were: -9.54%, -34.47%, -0.25%, 21.58%, and 39.30% respectively. Past index performance does not indicate future results.
Fee Disclosure: Subscription and redemption agents for the Huabao Hang Seng Stock Connect Information Technology ETF may charge a commission of up to 0.5%. On-exchange trading fees are subject to the rates charged by the securities firm. No sales service fee is charged.
Risk Warning: The Huabao Hang Seng Stock Connect Information Technology ETF and its feeder fund passively track the Hang Seng Stock Connect Information Technology Composite Index. The base date of this index is November 14, 2014, and it was launched on June 23, 2017. The index constituents mentioned in this material are for illustrative purposes only. Descriptions of individual stocks do not constitute any form of investment advice nor represent the holdings or trading activities of any fund managed by the fund manager. This product is issued and managed by Huabao Fund. Distributors do not bear responsibility for the product's investment, redemption, or risk management. Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement, and other legal documents to understand the fund's risk-return characteristics and choose a product suitable for their own risk tolerance. Past fund performance does not predict future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Fund investment involves risks. The fund manager assesses this fund's risk level as R4 (Medium-High Risk), suitable for Aggressive (C4) and above investors. Distributors (including the fund manager's direct sales channels and other distributors) assess the fund's risk according to relevant laws and regulations. Investors should promptly pay attention to the suitability opinions provided by distributors and base their decisions on the matching results. Suitability opinions may differ among distributors, and a distributor's risk rating of a fund product cannot be lower than the rating assigned by the fund manager. The description of the fund's risk-return characteristics in the fund contract and its risk rating may differ due to different considerations. Investors should understand the fund's risk-return profile and choose fund products cautiously based on their investment objectives, horizon, experience, and risk tolerance, bearing the risks themselves. The China Securities Regulatory Commission's registration of this fund does not indicate a substantive judgment or guarantee of its investment value, market prospects, or returns. Funds carry risks; investment requires caution.
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