On June 10th, the semiconductor and chip sector continued its upward momentum. Leading heavyweight Hygon Information Technology Co.,Ltd. (ASX: 688041) surged over 13%, while other stocks like China State Shipbuilding Corporation Special Gas Co., Ltd. hit new highs, with Jiehua Technology, Shanghai Silicon Industry Group, and Biwin Storage also among the top gainers. The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (ASX: 589190), which provides comprehensive exposure to the chip industry with a portfolio of core constituents, opened lower before rallying, with its on-exchange price currently up more than 3%. Capital inflows have been significant, with data from the Shanghai Stock Exchange showing the ETF attracted a combined 479.6 million yuan over the past three consecutive trading days.
Key Market Drivers
During the Computex 2026 computer exhibition, Intel's data center division indicated that a leading domestic large language model (LLM) company has increased its CPU demand fivefold from last year to this year. Bank of America Securities estimates that by 2030, the global server CPU market could reach $125 billion, with a compound annual growth rate of 31%, of which AI server CPUs are projected to account for a substantial 77%.
Industry Outlook and Data
The World Semiconductor Trade Statistics (WSTS) organization forecasts global semiconductor sales to grow 90% by 2026, reaching $1.5 trillion, primarily driven by memory chips, which are expected to see a 250% year-over-year increase. Data from SEMI shows global semiconductor equipment billings reached a record $36.55 billion in Q1 2026, a 14% year-on-year increase, driven by continued capacity expansion and technological upgrades for advanced logic chips, DRAM, and advanced packaging related to artificial intelligence (AI).
Analyst Commentary
Huayuan Securities noted that the global semiconductor supply chain has entered an expansion cycle. Domestic wafer fabs are accelerating capacity expansion and supporting the local supply chain due to supply security considerations. Significant breakthroughs in domestic substitution have been achieved in areas like etching, thin-film deposition, and CMP, with progress also expected in segments such as coating/developing and metrology/inspection. The domestic self-sufficiency sector has shown growth momentum following related companies' earnings reports. As advanced memory and process wafer fabs continue their expansion, this sector is poised for a new upward cycle.
ETF Strategy for the Chip 'Super Cycle'
To position for the chip industry's 'super cycle,' the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (ASX: 589190) and its feeder funds (Class A: 021224, Class C: 021225) passively track the SSE STAR Market Chip Index. While providing balanced, full-chain exposure to the chip industry, the ETF allocates over 90% of its weight to core areas like integrated circuits and semiconductor equipment, offering high exposure to hard technology and strong growth potential.
Cost Structure
Public data indicates the ETF 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 relatively low among ETFs tracking the same underlying index.
Important Risk Disclosures
The ETF passively tracks the SSE STAR Market Chip Index (Base Date: Dec 31, 2019; Release Date: June 13, 2022). The fund is issued and managed by Huabao Fund Management Co., Ltd. Distributors are not responsible for the investment, redemption, or risk management of the product. Investors should carefully read the Fund Contract, Prospectus, Fund Product Summary, and other legal documents to understand the fund's risk-return profile and choose a product 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 involve risks; investing requires caution. Sales agencies (including the fund manager's direct sales channels and other distributors) evaluate the fund's risk according to relevant laws and regulations. Investors should pay attention to the suitability opinions provided by the fund manager. Suitability opinions may differ among sales agencies, and the risk rating provided by a sales agency cannot be lower than that assigned by the fund manager. The description of the fund's risk-return characteristics in the Fund Contract and its risk rating may differ due to different considerations. Investors should understand the fund's risks and returns, and make investment decisions based on their own investment objectives, time horizon, experience, and risk tolerance, bearing the associated 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 involve risks; investing requires caution.
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