The semiconductor sector in the A-share market experienced a significant surge, with Guangliwei leading the gains by rising over 17%. Yuanjie Semiconductor Technology Co.,Ltd. and Mu Xi also saw substantial increases of more than 16% and 14% respectively. According to Wind data, 25 semiconductor-related stocks have doubled in value since the start of the year, with Yuanjie Semiconductor Technology Co.,Ltd. showing the highest increase, up over 217%.
Major Player Sees Sharp Intraday Rally
During the afternoon session, the semiconductor equipment segment saw a notable rise, becoming a focal point for the day's trading. The major semiconductor firm Acm Research (Shanghai), Inc. (688082.SH) surged over 16%, leading the gains strongly before closing with a 12.39% increase. Other companies including Kingsemi Co.,Ltd. (688037.SH), Beijing Huafeng Test&Control Technology Co.,Ltd. (688200.SH), Piotech Inc. (688072.SH), Sidea Semiconductor Equipment (Shenzhen) Co.,Ltd. (301629.SZ), Hangzhou Changchuan Technology Co.,Ltd. (300604.SZ), and Shenyang Fortune Precision Equipment Co.,Ltd. (688409.SH) also followed with upward movements.
SK Hynix Expansion Fuels Market Sentiment
Market sentiment was ignited by significant news from the industry forefront. Reports indicate that on June 2nd, SK Group Chairman Choi Tae-won stated at the Computex event in Taipei that its memory chip subsidiary SK Hynix plans to double its wafer production capacity within five years. This move aims to address the ongoing shortage of memory chips driven by global AI infrastructure development.
This large-scale expansion plan by SK Hynix exemplifies the global memory industry entering a super-cycle of high demand. A Goldman Sachs report from February this year suggests the market is on the brink of the most severe memory chip supply shortage in the past 15 years. Projections for 2026 indicate a supply-demand gap of 4.9% for the global DRAM market and 4.2% for NAND Flash, with the gap for AI-critical HBM (High Bandwidth Memory) reaching as high as 5.1%, marking the highest levels since 2011.
Against the backdrop of exploding AI computing demand, advanced memory products like HBM are in short supply, driving memory manufacturers to embark on unprecedented capacity expansion and technological upgrades. Chairman Choi's public statement is viewed by the market as a key indicator of a new large-scale capital expenditure cycle beginning in the global memory chip industry.
The latest forecast from SEMI (Semiconductor Equipment and Materials International) also confirms the industry's robust outlook. SEMI predicts the global semiconductor manufacturing equipment market will reach $133 billion in 2025, a year-on-year increase of 13.7%, with further growth to $145 billion in 2026 and $156 billion in 2027. SEMI attributes this rapid growth to expanding AI demand, which in turn drives investment across high-end logic chips, memory chips, and advanced packaging and testing.
The iteration of advanced logic and memory processes is pushing the value of equipment steadily higher. Analysis from Soochow Securities suggests that AI is driving the expansion of advanced logic and memory production, leading capital expenditure into a new upward cycle. With the explosion in AI computing demand, the global semiconductor equipment market is consistently reaching new highs. On the memory front, HBM is driving upgrades to higher-end DRAM processes, and 3D NAND is evolving towards stacks exceeding 400 layers, increasing the investment required per 10,000 wafer starts. China's share of global wafer capacity remains lower than its sales share, and capital expenditure by leading logic and memory manufacturers remains high. Coupled with imminent IPO financing for two major memory manufacturers, the momentum for capacity expansion is sustainable, supporting a medium to long-term uptrend in demand for front-end equipment.
Citic Securities similarly believes that the upward cycle in the memory industry chain and the deepening of domestic self-sufficiency will jointly drive the release of demand for semiconductor equipment. On one hand, memory expansion is characterized by high capital intensity and significant equipment elasticity, benefiting companies with a high proportion of memory-related orders in their semiconductor equipment business. On the other hand, the clear expansion plans of domestic memory leaders like YMTC and CXMT will continue to drive demand for core front-end processes such as etching, thin-film deposition, inspection, CMP, and coating/developing. Domestic equipment companies are now transitioning from breakthroughs in single points to a platform-based expansion of product categories. Leading equipment firms are continuously advancing into high-end logic and memory processes, with the push for self-sufficiency moving from mature nodes to more advanced segments.
Investment Considerations
Regarding investment strategy, Industrial Securities posits that "advanced process capacity expansion" will be a key theme for domestic self-sufficiency. They suggest monitoring companies such as Naura Technology Group Co., Ltd., Advanced Micro-Fabrication Equipment Inc. China, Zhongke Feice Technology Co.,Ltd., Piotech Inc., Huahai Qingke, Wuhan Jingce Electronic Group Co.,Ltd., Anji Microelectronics Co., Ltd., Yingde Gases Group Co., Ltd., and Dinglong Chemical Co., Ltd.. Additionally, the positioning of CoWoS and HBM within the AI industry trend highlights the importance of advanced packaging. They recommend attention to companies like Jingzhida, Kingsemi Co.,Ltd., Beijing Huafeng Test&Control Technology Co.,Ltd., Acm Research (Shanghai), Inc., and Huahai Chengke.
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