The profitability of A-share semiconductor companies scaled a new peak in the second quarter of 2026. Data reveals that the sector's net profit margin hit 38.8% in Q2 2026, climbing 15 percentage points quarter-on-quarter and 30.6 percentage points year-on-year—the highest single-quarter figure on record. The gross margin also rose to 50.8%, setting another all-time high.
Global semiconductor sales surged 124% year-on-year, with capacity utilization rates at two leading domestic semiconductor listed firms both exceeding 93%, indicating that industry momentum is likely to persist. Meanwhile, August US non-farm payrolls beat expectations by a wide margin, underpinned by robust AI investment trends. On September 4, the US Department of Labor reported 162,000 new non-farm jobs in August—roughly three times market forecasts—reflecting US economic resilience, closely tied to the accelerating pace of AI infrastructure spending.
Recent moves by tech giants underscore the continued vigor of the AI investment wave: Nvidia 's acquisition of Hugging Face to bolster its AI infrastructure, OpenAI 's release of GPT-6Astra, and Broadcom 's upward revision of its AI business guidance all point in this direction. Research from Guosheng Securities cautions that stronger-than-expected US employment could heighten market expectations of Fed rate hikes, with rising US Treasury yields potentially compressing valuations for long-duration growth assets. High-valuation firms that have yet to deliver earnings face greater pressure, while semiconductor materials—a segment with clear cyclical strength—may offer relatively better resilience.
Looking at specific sub-sectors, the electronic specialty gas market is undergoing a structural reshuffle marked by shrinking supply and rising prices. In tungsten hexafluoride, Kanto Denka Kogyo and Central Glass permanently halted production on July 1, together accounting for roughly 25% of global capacity, pushing the mainstream price of 5N-grade tungsten hexafluoride to RMB 1,810 per kilogram in early September. For nitrogen trifluoride (NF3), the global supply gap stands at about 34%, with 5N-grade prices climbing to RMB 290,000-320,000 per ton. Under this tight supply landscape, localization and overseas expansion efforts are expected to accelerate.
According to Wind and exchange data, the Huatai-PineBridge STAR Semiconductor Equipment ETF (588710) has recorded cumulative net inflows of RMB 863 million since August, with fund shares surpassing 11.6 billion—a fresh historical high. The ETF tracks the STAR Semiconductor Materials & Equipment Index, which is heavily concentrated in upstream "materials + equipment" (accounting for 89% of the index together). It also boasts over 80% exposure to the "memory chip" theme and over 67% to "advanced packaging," positioning it well to benefit from memory capacity expansion, wafer fab capital expenditure, and domestic substitution trends. Off-exchange investors can access it via its feeder funds (Class A: 024974 / Class C: 024975).
Historically, the index's exclusive focus on STAR Market stocks has endowed the ETF with notable elasticity. Over the past year, the STAR Semiconductor Materials & Equipment Index has gained 124%, outperforming other mainstream semiconductor indices such as the Semiconductor Materials & Equipment Theme Index (114%), the CSI All-Share Semiconductor Index (47%), the STAR Chip Index (57%), and the Guozheng Chip Index (38%). Given that semiconductor equipment and materials are high-beta sectors, investors should remain mindful of elevated valuations and trading volatility risks, and make rational, cautious decisions based on their own risk tolerance.
One strategic approach is to consider a barbell allocation, pairing the high-growth tech exposure with Huatai-PineBridge 's "dividend family" of funds—using the offensive side to capture industrial opportunities from high-growth technology tracks, while the defensive side aims to smooth portfolio volatility through dividend-generating assets. As one of China's first ETF managers, Huatai-PineBridge has over 19 years of experience in index investing, offering transparent, cost-efficient tools such as the CSI 300 ETF (510300) and the A500 ETF (563360). As of end-June 2026, the firm's ETFs have generated cumulative profits exceeding RMB 180.6 billion for holders over the past two years, making it one of only three public fund companies in the A-share market to surpass RMB 160 billion in cumulative profits during that period. Its ETFs have also distributed RMB 32.057 billion in dividends since inception, ranking among the only firms to exceed RMB 30 billion in cumulative payouts.
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