While a wave of planned share reductions has hit semiconductor concept stocks, the sector index surged over 6% on Monday, with multiple individual stocks hitting their daily limit-up. The shadow of shareholder sell-offs has failed to obscure the industry's momentum.
Recently, seven listed companies in the semiconductor industry chain, including Advanced Micro-Fabrication Equipment Inc. China (AMEC), Montage Technology, ASR Microelectronics Co., Ltd., Grandchip Technology, CanSemi Technology, JingSheng Opto-Electronics, and GigaDevice Semiconductor (Beijing) Inc., have disclosed plans for shareholder reductions. These companies span multiple segments of the semiconductor industry. Based on the latest closing prices, the total scale of planned reductions by these seven companies is estimated to be approximately 13 billion yuan. Among them, the leading semiconductor equipment company AMEC has the largest planned reduction scale, exceeding 6 billion yuan.
To mitigate potential secondary market price volatility, some companies have opted for a block transfer method via inquiry. Announcements show that Montage Technology, CanSemi Technology, and JingSheng Opto-Electronics have all released plans for shareholder block transfers via inquiry, rather than traditional methods like centralized bidding or block trades. Analysis points out that block transfers via inquiry are targeted only at professional institutional investors, not involving retail investors in the secondary market, thus having a smaller direct impact on stock prices. Furthermore, the shares acquired by transferees through this method have a six-month lock-up period, avoiding short-term selling pressure and reducing disturbance to the secondary market.
Apart from Montage Technology, CanSemi Technology, and JingSheng Opto-Electronics, the other four companies have chosen traditional reduction methods, combining centralized bidding and block trades.
It is worth noting that before this concentrated disclosure of reduction plans by the seven companies, several other semiconductor firms had already announced similar plans. According to incomplete statistics, leading companies in various semiconductor segments such as Biwin Storage Technology, SmartSens Technology, SiEngine Technology, Huate Gas, and GigaDevice Semiconductor (Beijing) Inc. had previously released reduction plans.
In the secondary market, the semiconductor sector as a whole was unaffected by the wave of sell-offs. The sector surged over 6% on Monday, with many stocks rising strongly to their limit-up. Among the companies that announced reduction plans, GigaDevice, Montage Technology, AMEC, and Grandchip Technology rose by 8.97%, 4.51%, 3.34%, and 2.37%, respectively.
**Sell-Off Plans: Profit-Taking at Highs or Valuation Correction?**
With semiconductor companies successively announcing reduction plans, the prevailing view within the industry is that this represents normal profit-taking exit operations. Since the market rally began on September 24, 2024, the share prices of many semiconductor companies have doubled, with some seeing increases of 3 to 4 times or even 10 times.
Looking at the reduction entities, such as executives of listed companies, their shareholding costs are relatively low. Given the substantial price increases, it is understandable for them to reduce holdings appropriately within regulatory limits. For early-stage venture capital institutions or industrial funds like industrial capital and venture capital funds, their investments inherently have cycles. Exiting via sell-offs at high prices is a normal financial operation.
An industry observer noted: "High stock prices are the result of valuation re-rating for some high-quality companies, while for others, it has gradually evolved into a 'valuation bubble.' When price-to-earnings ratios continue to rise while earnings growth fails to keep pace, the sell-offs do not signify a denial of the semiconductor industry's long-term prospects. Rather, they represent the self-expression of industrial dynamics in the capital markets. They puncture short-term sentiment bubbles, reminding the market to refocus from 'sector faith' back to companies' genuine profitability foundations and competitive barriers."
The observer added: "When the secondary market, driven by grand narratives like technological autonomy and AI computing power, pushes some companies' stock prices to valuation levels that would require years, even over a decade, of perfect growth to justify, industrial capital sees the reality gap. The cycle for converting orders in hand into scaled profits is far longer than market expectations, and the investment and risks in tackling the 'deep waters' of technological challenges are increasing. Sell-offs at this point are not bearish on the industry but rather a sober judgment that stock prices have far outpaced companies' own ability to deliver earnings. It is a rational act to lock in 'valuation premiums' at high levels."
**Semiconductor Industry Earnings Growth Continues to Accelerate**
Regarding the frequent announcement of reduction plans by semiconductor listed companies, the market's greater concern undoubtedly lies in their impact on the secondary market. A semiconductor industry analyst stated: "The coexistence of sell-offs by company executives and industrial capital alongside a positive industry outlook may seem contradictory, but they are actions based on different decision-making logics. Due to the high market enthusiasm for semiconductors, some shareholders are choosing to realize gains at high levels, which is a normal investment exit operation. The impact of sell-offs is more confined to short-term sentiment and the digestion of high valuations; it will not reverse the long-term logic driven by the dual engines of the AI innovation cycle and technological autonomy. The wave of sell-offs will accelerate the survival of the fittest within the sector. Companies lacking earnings support and relying on speculative concepts will face valuation corrections, while truly excellent enterprises with technological barriers and sustainable profitability will, after adjustments, attract further capital concentration."
Fundamentally, according to statistics, A-share semiconductor industry listed companies achieved cumulative operating revenue of 704.987 billion yuan in 2025, a year-on-year increase of 12.79%. Cumulative net profit attributable to shareholders reached 45.753 billion yuan, a year-on-year increase of 38.38%. In 2026, earnings growth is still accelerating. In the first quarter, listed companies in the industry achieved cumulative revenue of 192.698 billion yuan, a year-on-year increase of 24.71%, and cumulative net profit attributable to shareholders of 25.402 billion yuan, a year-on-year surge of 178.59%.
It is evident that, driven by multiple factors including sustained high demand for AI computing power and accelerated progress in key areas of technological autonomy, the semiconductor industry continued its recovery and upward trend in 2025 and the first quarter of 2026. The industry's overall performance achieved rapid growth, with profit-side performance significantly outpacing revenue-side performance, indicating a continuous improvement in industry景气度.
At the current juncture, Industrial Securities stated that computing power demand continues to rise, with widening gaps in areas like memory, PCBs, CPUs, switch chips, and MLCCs. Many segments are showing trends of both volume and price increases. It is anticipated that semiconductor equipment, materials, and components orders driven by capital expenditures are expected to experience a wave of explosive growth.
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