On August 7, China's three major equity indexes opened lower and edged slightly higher, while the STAR 50 surged 2.51%. The semiconductor sector continued its rebound. The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190), which holds nearly half its weight in memory chips and offers one of the lowest fee structures in its category, opened lower, experienced three dips and pullbacks during the session, yet closed up 3.12%, marking its fourth consecutive daily gain and demonstrating strong resilience.
Integrated circuit exports continued to surge. According to foreign trade data released by the General Administration of Customs, July exports skyrocketed by 116.57% year-on-year. Related concept stocks led the gains, with Raytron Technology Co., Ltd. rising over 9% and Aojie Technology Co., Ltd. gaining over 8%. Xinyuan Co., Ltd. and Nations Technologies Inc. also followed suit. Memory chip stocks collectively strengthened, with Lianyun Technology Co., Ltd., Biwin Storage Technology Co., Ltd., and Puyang Technology Co., Ltd. all rising over 5%.
Elon Musk recently stated that investors should not be concerned about memory chip demand, noting that the biggest bottleneck in the AI boom is memory. The demand for memory chips is significantly outstripping the growth in supply. Additionally, optical chips, semiconductor equipment, and wafer foundry sectors were active, with Shiji Photonics Co., Ltd. and Tianyue Advanced Materials Co., Ltd. rising over 7%, and Hua Hong Semiconductor Limited and Semiconductor Manufacturing International Corporation gaining over 3%.
As the global chip shortage intensifies, the "memory trio" of Samsung, SK Hynix, and Micron have sold out their entire 2027 production capacity. Industry insiders point out that a supply gap in memory storage has already emerged in 2026 and is expected to widen further in 2027, entering what could be the "most critical period" of storage shortage. On one hand, the global AI wave is driving capital expenditure from overseas cloud providers, with large model iteration and reasoning computing demand exploding, leading to volume and price increases across the computing hardware supply chain. Domestically, with Changxin Technology's listing on the STAR Market, China's memory industry has entered a new capacity expansion cycle, with local manufacturers set to expand capacity significantly over the next few years.
Combined with escalating external restrictions, the domestic substitution logic for China's semiconductor industry—especially in bottleneck areas like semiconductor equipment, advanced packaging, and computing chips—has shifted from being "policy-driven" to "market-driven." Some local manufacturers have achieved global competitiveness and secured substantial order breakthroughs. International consulting firm Gartner's latest forecast predicts that the global AI chip market revenue will surge from approximately $53 billion in 2023 to $198 billion by 2028, representing a compound annual growth rate (CAGR) of 30%. The situation of high-end chip supply falling short of demand is expected to persist for an extended period. This strong supply-demand imbalance provides a golden opportunity for domestic chip companies to quickly penetrate customer supply chains.
China Merchants Securities commented that against the backdrop of rapid AI development and overseas technology restrictions, the semiconductor chip industry is simultaneously benefiting from AI capital expenditure expansion and continued domestic policy support. Represented by three key directions—memory, domestic computing chips, and equipment materials and components—the industry chain's prosperity is continuously rising, with industry revenue and profits gradually entering a realization phase.
*To invest in the chip industry's "super cycle," consider high-beta 20CM options. Public data shows that the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) and its linked funds (A-class 021224, C-class 021225) passively track the Shanghai Sci-Tech Innovation Board Chip Index. While balancing allocation and covering the entire chip industry chain, it allocates over 90% weight to core areas such as integrated circuits and semiconductor equipment, offering high hard-tech content and strong offensive attributes. *Public data indicates that the management fee for the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) is 0.3%, and the custody fee is 0.08%, with a total fee rate of 0.38%, making it one of the lowest-cost ETFs tracking the same index. Data source: Shanghai and Shenzhen stock exchanges, etc. Note: Memory chip content refers to the combined weight of index constituent stocks in the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) that are also components of the Memory Chip Index (980138.CNI), which as of August 7 was 49.95%. Institutional viewpoint source: China Merchants Securities, June 2, 2025, "AI Wave and Domestic Substitution, Chip Industry Enters Era of Earnings Realization." ETF fee description: When investors subscribe or redeem fund shares, the subscription and redemption agency may charge a commission of up to 0.5%, which includes fees charged by the stock exchange and registration institution. Linked fund fee description: The subscription fee rate for the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP ETF A-Class (front-end fee) is 1,000 yuan per transaction for subscription amounts of 2 million yuan or more, 0.2% for amounts between 1 million and 2 million yuan, and 0.5% for amounts below 1 million yuan. The redemption fee rate is 1.5% for holding periods of less than 7 days, and 0% for holding periods of 7 days or more. The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP ETF C-Class does not charge a subscription fee, with a redemption fee rate of 1.5% for holding periods of less than 7 days, and 0% for holding periods of 7 days or more; the sales service fee is 0.2%. Risk disclaimer: The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) and its linked funds passively track the Shanghai Sci-Tech Innovation Board Chip Index, which was established on December 31, 2019, and published on June 13, 2022. The Shanghai Sci-Tech Innovation Board Chip Index's returns for the last five complete fiscal years are: 2021 +6.87%, 2022 -33.69%, 2023 +7.26%, 2024 +34.52%, 2025 +61.33%. The volatility of the Shanghai Sci-Tech Innovation Board Chip Index for the last five complete fiscal years are: 2021 34.32%, 2022 36.60%, 2023 28.64%, 2024 44.67%, 2025 34.34%. The composition of index constituents is adjusted according to the index compilation rules. Historical back-tested performance does not indicate future index performance. This product is issued and managed by Huabao Fund. The distributing agency does not assume product investment, redemption, or risk management responsibilities. Investors should carefully read the fund contract, prospectus, fund product information summary, and other fund legal documents to understand the fund's risk-return characteristics and choose a product suitable for their risk tolerance. The fund manager rates this fund's risk level 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 the performance of this fund. Past performance is not indicative of future results. Fund investment carries risks; invest with caution. Distributing institutions (including the fund manager's direct sales institutions and other distributors) conduct risk assessments on this fund based on relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. The suitability opinions of various distributors may not be consistent, and the risk rating of the fund product issued by the fund distributor cannot be lower than the risk rating issued by the fund manager. The risk-return characteristics and risk rating in the fund contract may differ due to different considerations. Investors should understand the fund's risk-return situation, consider their own investment objectives, horizon, experience, and risk tolerance to carefully select fund products, and assume their own risks. The registration of this fund by the China Securities Regulatory Commission does not imply a substantive judgment or guarantee of the fund's investment value, market prospects, or returns. Fund investment carries risks; invest with caution.
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