Stock Track | Hua Hong Semiconductor Shares Tumble 7.37% Amid Concerns Over Pricing Pressure

Stock Track08-09

Shares of Hua Hong Semiconductor, a leading Chinese chipmaker, plunged 7.37% in intraday trading on Friday, as analysts raised concerns over potential pricing pressure in the mature node semiconductor market.

According to a research note from Jefferies, while Hua Hong is expected to see a rebound in its average selling price in the second half of 2024 due to higher utilization rates, the analysts are concerned that wafer prices might turn weak from the second half of 2025 onwards. This is due to the anticipated ramp-up of new mature-node capacity in China, which could lead to oversupply and intensified competition.

Despite the bearish outlook, Jefferies maintained a "hold" rating on Hua Hong Semiconductor and raised its target price to HK$20 from HK$18.03. The analysts cited higher-than-expected utilization rates, leading to an upward revision in the company's gross margin forecasts for 2024-2027.

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