Understanding the Market | Chip Stocks Continue to Decline as the U.S. Plans to Restrict Key Software Exports; Institutions Optimistic About Accelerated Domestic Self-Control Process
Chip stocks continue to decline, with Hua Hong Semiconductor down 7.5% and Shanghai Fudan down 6.43%. The U.S. is considering restricting key software exports to China, leading to a drop in U.S. stocks, particularly in EDA software stocks. NVIDIA has exited the Chinese AI chip market, and Micron plans to stop supplying server chips to China. Analysts believe that U.S. export controls will accelerate the self-sufficiency process of China's semiconductor industry chain, with an expected acceleration in the expansion of domestic advanced production lines by 2026, promoting the process of domestic substitution
According to the Zhitong Finance APP, chip stocks continue to decline. As of the time of publication, Hua Hong Semiconductor (01347) is down 7.5%, trading at HKD 70.25; Shanghai Fudan (01385) is down 6.43%, trading at HKD 39; Jingmen Semiconductor (02878) is down 1.96%, trading at HKD 0.5; and SMIC (00981) is down 1.87%, trading at HKD 73.45.
On the news front, media reports on Wednesday cited a U.S. official and three individuals who received briefings from the U.S. government, stating that the White House is considering regulations on products produced using U.S. software and exported to China. This news has further contributed to the decline of U.S. stocks, particularly in the EDA software sector. Sources indicate that this plan is not the only option being considered and may not be implemented. Notably, NVIDIA has confirmed its complete withdrawal from the Chinese AI chip market, and Micron plans to halt the supply of server chips to China.
CITIC Securities released a research report stating that the penetrative export controls between the U.S. and China in the semiconductor and rare earth sectors signify a shift in trade friction towards a confrontation over upstream core technologies and raw materials. The U.S. implementation of semiconductor export controls will accelerate the domestic industry's self-sufficiency and achieve domestic substitution. China Merchants Securities believes that under the backdrop of the U.S. continuously strengthening export controls, the domestic self-sufficiency process will accelerate, while the expansion of advanced production lines in the country is expected to speed up by 2026, which will also drive positive expectations for orders in the domestic equipment/parts sector and the process of domestic substitution
