Geopolitical tensions have shifted, and overnight U.S. stocks saw a strong recovery, with semiconductor stocks rebounding notably. The Philadelphia Semiconductor Index surged 7.91%, closing at its highest level since June 5th. Memory-related stocks showed significant strength, with SanDisk gaining 14.5% and Micron Technology (MU) rising 11.66%.
In early trading on June 12th, China's semiconductor sector opened higher in sync, with the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190), which offers comprehensive exposure to the chip industry and features more robust constituent stocks, seeing its on-market price rise over 4%, currently up 3.9%. Semiconductor materials and equipment continued their strong performance, with Skyverse Technology and ACM Research (Shanghai) gaining over 10%, Piotech rising over 8%, and National Silicon Industry Group climbing over 6%. Analog chips also performed well, with 3PEAK surging over 13%. Additionally, Biwin Storage Technology Co.,Ltd. (688525) gained over 9%, reaching a record high, while Semiconductor Manufacturing International Corporation rose nearly 4%.
Key Developments Driving the Market
The growth rate of AI demand has far exceeded market expectations. Despite Taiwan Semiconductor Manufacturing (TSM) increasing its 3nm monthly capacity to 175,000 wafers, it still cannot meet the demand for AI chips and is considering a price increase of 15%. Furthermore, chip manufacturing capacity remains tight. Google is reportedly in talks with Samsung Electronics for the production of certain components for a next-generation advanced AI chip. Reports suggest Google plans for TSMC to use its advanced 1.4nm process for the core computing part of the new Tensor Processing Unit (TPU), while Samsung may utilize its 2nm process technology to produce an input/output die that connects the processor to memory.
Analyst Perspective on the Sector Outlook
Donghai Securities noted that global semiconductor demand continues to improve, with AI-related capital expenditure growing rapidly, and expects demand to continue recovering in June. On the supply side, strong demand in AI-related segments has led to tight capacity at upstream wafer foundries, even squeezing other industries, pushing up wafer prices. The firm anticipates the semiconductor supply-demand balance will remain tight in June. Regarding pricing, some memory prices continued to rise in May, and price increases have spread from memory, CPUs, and consumer electronics to power semiconductors, analog chips, MCUs, and other segments. AI remains the dominant theme for the future, with the localization rate of related supply chains continuing to rise.
Positioning for the Chip Industry's Growth Cycle
For investors seeking exposure to the chip industry's potential upcycle, high-beta instruments may be a suitable choice. Public information shows that the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) and its feeder funds (Class A 021224, Class C 021225) passively track the SSE STAR Market Chip Index. While providing balanced, full-industry-chain exposure to the chip sector, it allocates over 90% of its weight to core areas like integrated circuits and semiconductor equipment, reflecting its high concentration in hard technology and strong offensive potential.
Investment Product Details and Considerations
Public data indicates the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) has a management fee of 0.3% and a custody fee of 0.08%, resulting in a total expense ratio of 0.38%, which is comparatively low among ETFs tracking the same underlying index.
Investors should note that when subscribing for or redeeming fund shares, subscription/redemption agents may charge a commission of up to 0.5%, which includes fees levied by stock exchanges and registration institutions. For the feeder funds: Class A has a front-end subscription fee structure (0.5% for subscriptions below 1 million yuan, 0.2% for 1-2 million yuan, and a flat 1000 yuan per transaction for 2 million yuan and above). The redemption fee is 1.5% for holdings under 7 days and 0% for 7 days or more. Class C does not charge a subscription fee. Its redemption fee is 1.5% for holdings under 7 days and 0% for 7 days or more, with a sales service fee of 0.2%.
Essential Risk Information for Investors
The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND passively tracks the SSE STAR Market Chip Index (base date: Dec 31, 2019; release date: June 13, 2022). This product is issued and managed by Huabao Fund. Distributors are not responsible for the investment, payment, or risk management of the product. Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement, and other legal documents to understand the fund's risk-return profile and select products suitable for their own risk tolerance. The fund manager assesses this fund's risk rating as R4 (Medium-High Risk), suitable for investors with a suitability rating of C4 or above. The performance of other funds managed by the fund manager does not guarantee this fund's performance. Past performance is not indicative of future results. Funds carry risks, and investment requires caution. Distributors (including the fund manager's direct sales channels and other distributors) assess this fund's risk according to relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. Suitability opinions from different distributors may not necessarily be consistent. A distributor's fund product risk rating result shall not be lower than the risk rating result made by the fund manager. There may be differences between the fund's risk-return characteristics as described in the fund contract and its risk rating due to different considerations in the assessment. Investors should understand the fund's risk-return situation and, considering their own investment objectives, horizon, experience, and risk tolerance, make prudent fund selection decisions and bear 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, and investment requires caution.
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