On June 18th, the science and technology innovation chip sector staged a powerful short squeeze rally. The massive player Cambricon Technologies Corporation Limited launched a strong, high-volume attack, surging over 16% at its peak and closing up more than 14%. Its share price hit a new high above 1,500 yuan, with its closing market capitalization approaching 950 billion yuan, now just a step away from the "trillion club."
Huahong Grace Semiconductor Manufacturing Corporation rose over 12% intraday, closing up more than 6%. Hygon Information Technology Co., Ltd. gained over 6%, while Semiconductor Manufacturing International Corporation and BIWIN Storage Technology Co., Ltd. both advanced more than 4%. More than ten stocks, including Huahong Grace, BIWIN Storage, CSSC (Handan) Guangda Special Gas Co., Ltd., and Joulwatt Technology Inc., collectively reached new historical highs.
The on-market price of the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190), which offers a comprehensive and core-focused portfolio in the chip industry, surged over 5% at one point, closing up 4.46% and consecutively refreshing its record high since listing.
Outperformance in the Semiconductor Rally
It is noteworthy that within this year's semiconductor market rally, the science and technology innovation chip segment has demonstrated impressive offensive strength in its upward movement. The SSE STAR Market Chip Index has accumulated a gain of 76.55% year-to-date, outperforming among comparable semiconductor chip indices.
Note: The annual performance of the SSE STAR Market Chip Index for the past five full years is as follows: 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 historical backtested performance does not predict future index performance.
Catalysts for the Market Movement
The rally is driven by leading cloud providers increasing their procurement of domestic chips. Industry sources indicate that ByteDance is in discussions with Tianshu Zhixin Semiconductor Co., Ltd. to purchase at least 50,000 AI chips, primarily for inference workloads, sparking market imagination about the large-scale deployment capabilities of domestic AI chips.
Data from IDC in April shows that the total delivery of AI accelerator cards in the Chinese market reached 4 million units in 2025, with domestic manufacturers delivering 1.65 million units, raising their market share to 41%. NVIDIA's share in China significantly contracted from a near-monopoly of 95% to 55%.
Institutional Analysis and Outlook
Guosen Securities points out that against the backdrop of restrictions on overseas high-end chips, the resonance between domestic information innovation and large model iteration is accelerating the adaptation and volume ramp-up of domestic AI chip manufacturers, bringing incremental opportunities to the full-stack ecosystem. Guojin Securities also believes that computing power competition has moved beyond the contest of single-chip performance, entering a new stage of system-level competition involving chips, storage, interconnects, software, and cluster synergy. Domestic computing power chips are experiencing a quadruple resonance of policy, demand, technology, and ecosystem, with the industry entering a high-growth cycle of order ramp-up and earnings realization, becoming a core allocation theme in the technology sector.
Entering mid-to-late June, the market is approaching the window for mid-year report validation. Due to high earnings expectations, market attention on leading companies in high-growth segments within the technology track is expected to further intensify, potentially leading to a scenario where the strong become stronger on the hard tech front.
A Strategic Investment Vehicle
To position for the chip industry's "super cycle," consider high-beta instruments. 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 allocation and full-chain exposure to the chip industry, they maintain a weight exceeding 90% in core areas like integrated circuits and semiconductor equipment, offering high hard-tech content and strong offensive characteristics.
Public data indicates that 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 relatively low among ETFs tracking the same underlying index.
Data source: Shanghai and Shenzhen Stock Exchanges, etc.
Institutional view sources: Guosen Securities report dated June 17, 2026, titled "Large Models Drive Computing Power Transformation, Domestic Computing Power Welcomes Incremental Opportunities"; Guojin Securities report dated April 30, 2026, titled "Giants Firmly Invest in AI, Domestic Substitution Deepens."
ETF fee-related note: When subscribing for or redeeming fund units, subscription/redemption agents may charge a commission of up to 0.5%, which includes relevant fees charged by stock exchanges and registration institutions, etc. Feeder fund fee-related note: The front-end subscription fee rate for the HUABAO SSE STAR Market Chip ETF Feeder Fund Class A is a flat fee of 1,000 yuan per transaction for subscription amounts of 2 million yuan or more, 0.2% for amounts between 1 million yuan (inclusive) and 2 million yuan, and 0.5% for amounts below 1 million yuan. The redemption fee rate is 1.5% for holding periods under 7 days and 0% for holding periods of 7 days or more. The HUABAO SSE STAR Market Chip ETF Feeder Fund Class C does not charge a subscription fee. Its redemption fee rate is 1.5% for holding periods under 7 days and 0% for holding periods of 7 days or more. A sales service fee of 0.2% applies.
Risk Disclosure: The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND passively tracks the SSE STAR Market Chip Index. The base date of this index is December 31, 2019, and its release date is June 13, 2022. This product is issued and managed by HUABAO FUND MANAGEMENT CO., LTD. Distributors do not assume responsibility for the investment, payment, and 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 characteristics and choose a product suitable for their own risk tolerance. The fund manager assesses this fund's risk rating as R4 - Medium to High Risk, suitable for investors with a suitability rating of C4 and above. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Past performance of the fund is not indicative of its future performance. Funds carry risks, and investment requires caution! Sales institutions (including the fund manager's direct sales channels and other sales institutions) assess the risk of this fund according to relevant laws and regulations. Investors should pay timely attention to the suitability opinions issued by the fund manager. Suitability opinions from various sales institutions may not necessarily be consistent, and the fund product risk rating results issued by fund sales institutions shall not be lower than the risk rating results made 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 risk-return situation, combine it with their own investment objectives, horizon, experience, and risk tolerance to choose fund products carefully, and bear the risks themselves. The China Securities Regulatory Commission's registration of this fund does not indicate its substantive judgment or guarantee of the fund's investment value, market prospects, or returns. Funds carry risks, and investment requires caution!
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