On May 20th, domestic chip stocks continued their strong advance. The Huabao Sci-Tech Innovation Board Chip ETF (589190), which provides comprehensive exposure to the chip industry, opened lower but quickly surged, with its on-market price at one point rising approximately 3%. It is currently up over 2%, once again setting a new historical high since its listing.
Most stocks in the sector advanced. China Science Testing & Control Technology Co., Ltd. soared over 16%, while ASR Microelectronics Co., Ltd. and Lianyun Technology Co., Ltd. both gained over 6%, also reaching new record highs. Among the major weighted leaders, Semiconductor Manufacturing International Corporation (SMIC), Hua Hong Semiconductor Limited, Cambricon Technologies Corporation Limited, and Piotech Inc. all rose over 5%. Hygon Information Technology Co.,Ltd. climbed nearly 4%.
On May 19th, SMIC announced that based on customer demand and its order book, the company is more optimistic about its overall operations for this year compared to the previous quarter. The strong demand for supporting chips driven by AI has directly led to supply shortages for the company's power management chips.
Benefiting from multiple factors including accelerated domestic substitution and expanding AI computing power demand, the chip industry's prosperity may continue its upward trend. China Merchants Securities pointed out that global AI industry chain sentiment remains elevated. The supply-demand gap in the memory sector is expected to persist until 2027, with domestic module companies entering a period of profit expansion, leading to continued optimism regarding memory company performance. The global CPU market space is expanding significantly, with domestic computing power orders and revenue growing rapidly, simultaneously driving demand for domestic advanced process nodes. The firm remains positive on segments within the domestic computing power chain, such as CPUs and advanced process technology.
It is worth noting that the Sci-Tech Innovation Board chip sector has demonstrated strong upward momentum in the market performance so far this year. The SSE STAR Market Chip Index has cumulatively gained 53.79% over the period, showing relatively favorable performance among comparable semiconductor chip indices.
Note: The SSE STAR Market Chip Index's annual gains/losses for the past five full years are: 2021: 6.87%, 2022: -33.69%, 2023: 7.26%, 2024: 34.52%, 2025: 61.33%. The index's constituent stocks are adjusted according to its compilation rules, and its past performance does not predict future results.
For exposure to the chip industry's "super cycle," the 20% price-limit flexibility of the Sci-Tech Innovation Board is a preferred choice. Public information shows that the Huabao Sci-Tech Innovation Board Chip ETF (589190) and its feeder funds track the SSE STAR Market Chip Index. While providing balanced exposure and full-chain coverage of the chip industry, the fund allocates over 90% of its weight to core areas like integrated circuits and semiconductor equipment, representing high hard-tech content and strong technological barriers.
Data source: Shanghai & Shenzhen Stock Exchanges, etc.
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